February 2024 Technical Strategy Update

February 2024 Technical Strategy Update

What lessons we learned from January:

  • SPX, NASDAQ rally back to new all-time highs was certainly a bullish development despite some evidence of breadth waning.  Equal-weighted SPX, Russell 3k, nor Small and Mid-Cap indices have not yet achieved this move.
  • Broad-based recovery from October into December largely faltered in the month of January.  Despite a +1.5% gain for SPX, the Equal-weighted SPX, NASDAQ and Russell 3k index all finished down.  Difference in returns between SPX and RSP has hit one of the largest divergences since 1990 
  • Technology’s dominance in January resulted in this sector breaking back out to new all-time highs vs. SPX which remains a very constructive development
  • Correlation between Equities and Treasuries has subsided a bit in the last month.  Despite a 40 basis point lift in Rates from late December into late January, Equities managed to rally to new all-time highs. 
  • Weekly Cycles show a bullish 2024 but daily cycles suggest 1Q-2Q weakness being possible which might approximate 7-10%.  At present, this looks premature but might materialize from March into April.  
  • Breadth gauges have largely waned in January, showing that consolidation was necessary after the 700 point SPX rally from October into December 2023.  This underperformance in Industrials, Discretionary, Materials isn’t necessarily a strong negative Seasonality in Election year February’s often brings about choppiness and lower than average returns for SPX
February 2024 Technical Strategy Update
February 2024 Technical Strategy Update
February 2024 Technical Strategy Update
February 2024 Technical Strategy Update
February 2024 Technical Strategy Update
February 2024 Technical Strategy Update

Most recent Upticks update here.

February 2024 Technical Strategy Update
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