Market Direction Model - Model switches to SELL on May 1, 2024

Published:

1 May 2024 10:04 ET

MDM has switched to a SELL signal.

The hot PCE suggests a hawkish Fed testimony from Powell this coming Wednesday. Rising long bond yields, the dollar, diminishing global liquidity, and a Fed that is forced into a hawkish stance due to persistent and potentially accelerating inflation all work against the major averages. Only one rate cut is now priced into the market and long bond yields even suggest a rate hike is possible.

My comment on the prior two signal changes: The MDM rarely makes such quick changes in signal but there was an opportunity to switch to a buy signal on April 22 in an oversold market, but the materially weak GDP result together with META’s valuation plummeting after a disappointing earnings report caused the major averages to gap lower at the open on April 25. This was followed by strong earnings out of GOOGL and MSFT which caused the majors to gap higher the next day but on lighter volume.

List of Potential ETFs for investors:

1-times inverse

PSQ - NASDAQ 100 1x bear.

2-times inverse

QID - NASDAQ 100 2x bear.

3-times inverse

SQQQ - NASDAQ 100 3x bear.

NOTE: This is a suggested list. Investors may wish to become acquainted with the full range of available ETFs, and should make an effort to understand how these ETFs are created and what their components are, as well as being aware of the downside risks involved, especially with leveraged ETFs. Certain ETFs may be more appropriate depending on one's risk tolerance levels. Typing in keyword 'ETF' into the FAQ keyword search bar or going here https://www.virtueofselfishinvesting.com/faqs/search?p=1&q=etf and visiting this site https://etfdb.com/ can be instructive.

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