The S&P 500 Triggers A Bearish Signal

[CLICK HERE JOIN OUR LIVE TRADING & TRAINING SESSIONS]( Hello investor, The S&P 500 Triggers A Bearish Signal Yesterday was a tough day for the S&P 500 with a 1.6% loss, breaking below its key 100-day moving average which is a bearish signal. This was an adjustment of Wall Street’s expectations after the Fed Reserve chose to sound hawkish on its future rate path. Officials predicted another rate hike this year and took two 50-basis-point rate cuts of the table for next year. So, rates would stay higher than investors originally expected. - “The lesson for the markets is that a lot of investors had been second-guessing the Fed,” said Chris Gaffney, president of world markets at EverBank. “They’re committed to keeping inflation down and part of that, I think, is to keep rates higher for longer — and markets are finally coming to grips with that.” How do we know this? 10-year Treasury yields hovered near 4.5% -- the highest since 2007. So, this implies that investors expect higher rates for longer. The dollar also rose. - “The outlook was significantly more hawkish than what the market was expecting,” said Fiona Cincotta, senior market analyst at City Index. “The Fed has been doing what it said it will do – keep rates higher for longer. The market is playing catch up with what the Fed has been saying all along.” Fiona Cincotta, senior market analyst at City Index (Photo: TD Ameritrade) What’s more, applications for unemployment benefits fell to the lowest since January last week. Meaning? Less people are unemployed, indicating a strong labor market. Once again, it shows that the Fed still has a long way to go in its battle against inflation. - “On net, it was a solid read from one of the closest to ‘real time’ employment data investors are afforded,” said Ian Lyngen at BMO Capital Markets. - “It also marginally increases the chances the Fed hikes in November and certainly reinforces the Fed’s messaging regarding avoiding cuts as long as possible in 2024.” Former Treasury Secretary Lawrence Summers said Fed officials are “too optimistic” in their economic projections, continuing his thesis that the economy is due for a hard landing. He believes that we could see lower growth or higher inflation than projected. And there’s a chance of stagflation (low growth, high inflation). - “The Fed is considerably too optimistic,” Summers said. “It’s more likely than not that they’re either going to get surprised on the higher-inflation side, or on the weak” growth side, “or possibly both could materialize — in a stagflationary kind of dynamic,” he said. (Photo David Degner / NYT) Fed officials boosted its GDP growth this and next year in their updated projections on Wednesday. They are optimistic about inflation, as well. They see the core CPI to fall to 2.6% by the end of 2024, close to its 2% target. To be fair, Fed Chair Jerome Powell said a soft landing isn’t in his baseline expectation. Regardless, Summers thinks Wall Street and the central bank are too optimistic about the economy, and “there’s probably more risk that they’re going to need to move rates upwards more than they’re now projecting, but the risk is very much a two-sided one.” - “People are just a little too optimistic right now, and I think the Fed’s caught into that optimism,” Summers said. “It’s a good idea to under-forecast and over-perform.”  Invest In This Sneaky Play To Win Smart Homes Today’s Stock Pick: Alarm.com Holdings, Inc. ([ALRM]() Today’s pick owns about 25% of the current market for monitored home security. And that market is growing fast (more on that later). Alarm.com started by specializing strictly in home security. If this is all the company ever did, it has plenty of headroom to grow. - Only 6% out of the 140 million homes in the U.S. are using Alarm.com, despite its dominant market share. What does this mean? The opportunity to penetrate the market is nearly endless! The company has built a strong reputation in smart home security, getting recognition from technology experts like the annual Consumer Electronics Show as well as security publications. (Source: Alarm.com) Alarm.com’s actively-monitored security capabilities differentiate the company from standalone devices like Amazon subsidiary Ring’s popular doorbell camera. The company’s products are also typically installed by professionals. The whole market for smart security is expected to grow 17% a year over the next 8 years, according to Strategy Analytics. (Source: Alarm.com) Moreover, smart security is just the starting point for a much bigger opportunity. - According to research performed by the Consumer Technology Association, “Security is the primary purchase motivator for smart home.” (Source: Alarm.com) That makes Alarm.com’s home security the perfect gateway to becoming a leader in smart home management. And that’s exactly what the company’s been doing. Alarm.com Holdings has expanded its connected home offerings considerably over the last 21 years, through a combination of acquisitions and internal development. - Products and services now include a smart thermostat, a smart water valve and meter, audio and video artificial intelligence, web and app based management and analytics, and business services. - The company’s apps also integrate with other top brands’ smart home products, including LiftMaster garage doors, Sonos speakers, and Schlage locks, and even integrated solar power and home batteries like Enphase. (Source: Alarm.com) Business services represent a huge future growth opportunity in particular. Right now, Alarm.com Holdings is focusing on three major priorities: - PointCentral will offer property owners a full suite of services. The company views this as a win-win for landlords looking to protect their property as well as tenants looking for managed security as an amenity. Alarms.com estimates the market size at 27 million multi-family homes and 16 million single-family rental homes. - EnergyHub will help utilities avoid blackouts. The system will offer resource analytics to utilities based on smart thermostats, inverters, and water valves. Major utilities like AvanGrid in the northeast corridor, Los Angeles Dept. of Water & Power, and even NationalGrid in England have signed on seeking to reduce peak usage. - Building36 will monitor HVAC and provide real-time diagnostics, with the aim of reducing more costly repairs down the road. Alarms.com also believes it can grow international sales, which only made up 3% of revenue last year. Company revenue has been growing 22% a year on average since 2016, with the majority coming from recurring software licenses. (Source: Alarm.com) Bottom Line: Alarms.com Holdings has built a large market share in smart security, an industry that’s set to explode by 17% annually over the next six years. With only 6% of homes penetrated, Alarm.com has a long, long growth path. You can count on this stock to become a monster compounding stock. [CLICK HERE JOIN OUR LIVE TRADING & TRAINING SESSIONS](       © All Rights Reserved, Trade Alliance If you no longer want to receive these messages, you may [click here]( to unsubscribe.