New Address as of 10/4/24 — 60 Broad Street, 39th Floor, New York, NY 10004
DJIA: 52,064
September is a bit like that famous Mae West line… except when it’s bad it’s badder. Over the last hundred years, but who’s counting, September is the only down month. The good news, however, it’s not down all that much more than up. Hope springs eternal, but a deteriorated technical background is less hopeful. While blame for the weakness is laid on the price of Oil, it seems more about the price of money. This in turn has its impact both economically and, in this case, technically – there are many rate-sensitive stocks. The deterioration shows up most dramatically in 12-month new highs/new lows, which last week saw NYSE new lows almost double the number of new highs – this against market averages dancing around their highs. Divergences such as this are the equivalent of cancer when it comes to the stock market.
Key in tennis is get your racket back early and follow through. The market doesn’t have a racket, and this market doesn’t follow through. Somewhat consoling is that it doesn’t much follow through in either direction. The Semis look done, then rally, Software just the opposite and then over again. Meta (META – 644) goes from existential risk to best in class, FANGwise. Biotechs being biotechs have binary outcomes – best to stick with the ETFs IBD (23) or XBI (157), rather than Amgen (AMGN – 383) whose chart had been a good one. Meanwhile, Commodities still makes sense, and not complicated – GDXJ (124) or CVX (213). Everyone likes to talk about long-term investing, show us the long-term investments. For now, there seems some money to be made in Commodities, but they’re the last in line as a long-term investment. Stocks already in long-term uptrends seem a place to start, stocks like Microsoft (MSFT – 492) and Coca-Cola (KO – 88).
Frank D. Gretz
PLEASE NOTE: Unless otherwise stated, the firm and any affiliated person or entity 1) either does not own any, or owns less than 1%, of the outstanding shares of any public company mentioned, 2) does not receive, and has not within the past 12 months received, investment banking compensation or other compensation from any public company mentioned, and 3) does not expect within the next three months to receive investment banking compensation or other compensation from any public company mentioned. The firm does not currently make markets in any public securities.
Back to Insights