Monday 10/7/2024
Today's action reversed Friday's up move.
Here is a two hour chart showing the Friday rally and then today's pullback. This is also an example that mood is unremembered, hey on Monday we forgot Friday and that mood can turn on a dime.
A bear market eventually takes the entire market. Here the Utility Index reached its 2022 high and then reversed today. Yes this reflects five waves up but it also reflects the expectation of higher interest rates. Higher rates are not good for utilities which constantly need to finance expansion. the ten year note hjas quickly returned to 4%, so much for the FED controlling inflation.
Last week the think was that the FED (which follows not leads the markets) would cut yet again and further hte stock rally. I saw a piece today what Goldman is calling for a higher close for 224 and 2025. My friends at EWI and I are calling for lower, much lower year end closes. Here is the latest.
Crude oil has soared $12 in the last 21 weeks closing in on my next target of $78. This of course is due to increase wars in the Middle East not to mention Houthi strikes at oil tankers.
WTIC is up $2.86 just today or 3.83%. And the thinking was that the FED cuts to its overnight rate would lower long term rates, think again. Here is the price of the ten year note. Bond prices fall when interest rates rise. Friday its value dropped a good bit and rates rose which makes the day end rally Friday out of synch with the bond market. The ten year not is now back to 4%. So the FED has done nothing to bring down longer term rates, one of several reasons for the market decline today.
The volatility index VIX is up 3% just today, this is the worry index, the more worry the higher it goes.
Here is our line up of bear funds that track at a reverse 1x to the actual fund, in short if the SPX drops 1 %, the SH gains 1%
Bear Funds
Russell 2000 RWM
SPX SH
NDX NASD PSQ
DJIA Hdge
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