[Outlook] Various Assets Extend Their Hot Streaks

Can It Continue? (You Might Be Surprised) Various Assets Extend Their Hot Streaks Can It Continue? (You Might Be Surprised) By Donn Goodman October 20, 2024 Welcome back readers and loyal subscribers. Glad you are with us. We hope that you had a good week and were able to profit from the various markets that continued to move higher. If you are following any of the MarketGauge models, including but not limited to the ETF Sector Plus, Profit Navigator, GEMS, Small & Midcap Earnings Growth or a few others, then hopefully this recent period has helped us earn even your confidence that the risk management and momentum drivers are working well and leading our subscribers to above average performance. If you would like more information on how to become a subscriber of various investment strategies, please contact Rob@MarketGauge.com for additional information. The continued move higher. Stocks finished the week broadly higher after a mid-week pullback. The rally in stocks continues, as we will illustrate below, with new all-time highs this past week in the Dow and the S&P 500. The S&P was up 0.86% for the week. The S&P 500 has risen for six consecutive weeks and nine of the past ten. [@CyclesFan]( points out the S&P 500 has had six other six-week winning streaks in the past decade. The seventh week has been a coin toss, with three instances closing higher and three closing lower. The NASDAQ scored a fresh three-month high and ended the week up 0.22%. To the market’s surprise, semiconductors had a negative week as we describe in the Big View bullets below. But it was the small cap stocks and the Russell 2000 that stole the show this past week, up 1.98%. See IWM charts below: Most surprisingly, some of the other asset classes performed even better than stocks. We will go into more detail shortly. Global easing. The European Central Bank (ECB) delivered its first back-to-back rate cuts in well over a decade in the wake of several cooler-than-expected European inflation reports. This helped propel the US dollar to gain strength as the US economy continues to show strength despite the global growth worries that keep resurfacing (additional charts are forthcoming). Strong earnings season is upon us. Recession fears abate. Since the beginning of the year, it seems that we have heard nonstop from the doom and gloom market predictors that corporate earnings would begin to decline and that we would eventually feel the shock (major sell off) of their grim prognostications. They have been proven wrong time and again by a resilient and growing US economy. Given that this is an election year, coupled with a Fed easing campaign, high stock and corporate bond liquidity, low defaults on high yield paper and lower trending inflation, it is not surprising that most asset classes (ex the energy sector), continue to find bullish buyers and surprisingly big beats on corporate earnings. (More on lagging sectors shortly). This past week, the banks (and financials) came alive as most of the early big banks not only had good earnings but beat by a wide margin, well above top-line revenues as well as net earnings per share. With equity multiples a bit stretched right now and corporate bond spreads tightening, many investors are beginning to use options and other hedge instruments to protect their gains going into the election season and end-of-year rebalancing. Yet, many investors, including our own Mish, recently extolled the 2-year birthday of the new bull market and if historians are correct, we may still be in the early innings of the “bull market” which could run for a few more years. My conservative nature says that the markets should be concerned given the high levels of debt, lack of interest by foreign entities to invest in our US Treasury market, an aging population and the onset of automation. We could be in for some turbulent and more volatile markets in 2025 and beyond. Continued soft-landing? The latest Bank of America Global Fund Manager Survey shows the odds that a future (2025) soft-landing may have slightly decreased. But the hard landing respondents faded just as much, falling into the single digits for the first time since June, with just 8% seeing a recession in the next 12 months. See chart below. A great 12 months for the equity markets. Would it surprise you to know that since October 1, 2023, the S&P 500 is up 37% and the NASDAQ 100 (QQQ) is up 38%? I recall attending an investment conference last October and many of the stock publishers as well as investment managers sharing their thoughts that we could see a bumpy road in 2024, although all seemed to agree that it was an election year and that might help the markets stay buoyant. Several of the market experts I listened to or met with at the conference also came out with negative market concern this past summer convinced that we might not see the markets go any higher than 5500 by year end. Several issued warnings to “get out”. (in case you are not aware the S&P is near 6,000 as of last Friday’s close). We are fortunate at MarketGauge to have several risk managed investment strategies that have stayed invested for most of 2024. Several of these have participated in most of the market’s upside. One of these is Profit Navigator. If you would like more information on this investment strategy and several others, please contact Rob@MarketGauge.com for additional information. It really has been a good 12 months. See the chart below on the S&P 500: I have read many articles on why the few mega-cap S&P 500 stocks (the “MAG 7”) are fueling the market, the following chart shows that this may no longer hold true. The stock market has broadened considerably. Click here to continue reading about: - SPY vs Equal Weighted S&P 500 (RSP) - Advance/Decline Internals - Dow Theory Divergences - Earnings’ Impact On Inflation - Assets on Hot Streaks - Election Seasonality - Big View Bullets - Keith’s Weekly Market Analysis Video [Click here to continue to the FREE analysis](=)[Click here to continue to the PREMIUM analysis]() Best wishes for your trading, Donn Goodman Every week we review the big picture of the market's technical condition as seen through the lens of our Big View data charts. The bullets provide a quick summary organized by conditions we see as being risk-on, risk-off, or neutral. The video analysis dives deeper. Risk On - Markets were all generally up slightly on the week with the [Russel outperforming](, closing up over +2% on the week. The Dow and S&P closed on new all-time highs. (+) - [Volume patterns]( remain fairly mixed, with the exception of the Russel, which looks poised to explode higher on price out of a multi-month compression range. (+) - 13 of the [17 sectors]( we track were up on the week led by gold miners, homebuilders, and utilities. Surprisingly, semiconductors was the weakest sector, down -2% for the week. Only 2 of the 17 sectors are not in “bullish” phases. We are giving this an overall positive read for the market. (+) - Metals exploding higher was the theme for the week with [Gold hitting new all-time highs](). Energy was down sharply on the week, generally a good thing for the consumer. (+) Click here to continue reading about: - SPY vs Equal Weighted S&P 500 (RSP) - Advance/Decline Internals - Dow Theory Divergences - Earnings’ Impact On Inflation - Assets on Hot Streaks - Election Seasonality - Big View Bullets - Keith’s Weekly Market Analysis Video [Click here to continue to the FREE analysis and video.](=)[Click here to continue to the PREMIUM analysis and video](=). Best wishes for your trading, Keith Schneider CEO MarketGauge P.S. When you’re ready, here are 3 free ways we can help you reach your trading goals… - [Book a call with our Chief Strategy Consultant](, Rob Quinn. He can quickly guide you to the resources that you'd like best. - Get the foundational building blocks of many of our strategies from Mish's book, [Plant Your Money Tree: A Guide to Building Your Wealth](), and accompanying bonus training. - [Review quick descriptions](=) of our indicators, strategies, services and trading systems here. Get more - follow us here... 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