New Address as of 10/4/24 — 60 Broad Street, 39th Floor, New York, NY 10004
DJIA: 44,694
Tariffs… they’re a good thing? We all have our opinions, but in the end, it’s the market’s opinion that counts. On Wednesday tariffs were a good thing. Then, too, we don’t think for a minute the news was worth 500 Dow points. It’s back to the idea it’s the market that makes the news – this is a market that still wants to go higher. And the rally revived the meandering average stock, to the tune of nearly 2 to 1 up. Were the market in trouble, you would have expected these numbers to start lagging – what we called “bad up-days.” Studies or history clearly favors the uptrend – the S&P has been above its 20-day average close to 60 sessions. This almost invariably leads to higher prices six months later.
Last week’s theme seemed to be one of “sell the good news,” so it will be interesting to see how Tech reacts this week. Like the S&P, the Tech sector has remained above its own 20-day average to the point where it is typically higher even 12 months later. The market’s problem is the rest of the market. It has been some time since the Equal Weight S&P 500 ETF (RSP – 187) made a new high, and only some 60% of the S&P components are above their 200-day moving average, that is, in medium-term uptrends. Against ongoing highs in the average itself, this is a bit disturbing. For the NYSE as a whole, the number is even considerably less.
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.
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