Seasonality and cycles show that September might hold up until mid-month Array ( [cookie] => 9f9b8b-125b44-4eb614-ff9567-508e70 [current_usage] => 2 [max_usage] => 2 [current_usage_crypto] => 2 [max_usage_crypto] => 2 [lock] => 1 [message] => [error] => [active_member] => 1 [subscriber] => 0 [role] => fsi_pro [visitor_id] => 593469 [reason] => [method] => ) 1
The recent stalling out in most US Equity indices over the last week hasn’t taken away from the appeal of the current rally from early August lows. A bullish advance back to new all-time highs is still expected into mid-September ahead of any seasonal Fall correction. The Equal-weighted SPX has already pushed back to new all-time high territory coinciding with the breakdown in the US Dollar and Treasury yields, and Small-caps have started to kick into gear once again. Furthermore, market breadth remains constructive and sentiment is not yet bullish enough to mark a larger market peak. Cycles show strength into mid-September in both Equities and Treasuries before a selloff takes hold, and sectors like Financials, Healthcare, and Consumer Discretionary have been instrumental in serving as a “tailwind” for Equity gains at a time when Technology has been a bit wobbly. Overall, unless Technology, starts to roll over in bigger fashion it looks right to stay bullish.
Despite the excitement surrounding NVDA this week, US benchmark averages failed to please neither Bulls nor bears alike this week, trading very much range-bound in neutral consolidation that’s been persistent since 8/19. While the markets showed signs of late-day gains to end the day and week on a high note, SPX failed to yet exceed the level needed to have confidence that the consolidation from the past week has been resolved.
However, as discussed yesterday, four sectors managed to push to new all-time weekly high closes this past week: Industrials, Utilities, Healthcare, and Financials. That number rises to five when eyeing monthly all-time high closes, as Technology (despite its August volatility) also managed to churn out a new all-time high record close. (All of these are based on Equal-weighted, not cap-weighted basis)
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Thomas J. Lee
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