Market Direction Model - Model switches to SELL on September 26, 2023

Published:

26 Sep 2023 15:48 ET

MDM has switched to a SELL signal.

Both the NASDAQ Composite and S&P 500 did not bounce as the downtrend continues.

Markets are fighting a backdrop of diminishing global liquidity, long bond yields that are sufficiently high to compete with stocks, a stronger dollar, and deflated AI expectations due to companies overpromising.

On bond yields, the real yield is the yield on US treasuries minus inflation. The Fed is nearing the end of its hiking cycle but where inflation heads is less certain. If inflation continues to fall, the Fed is still likely to keep rates at current levels for a prolonged period. 2% is still far off. Some members have said 2% is not achievable until late 2024. In such a case, the real yield would rise which is bearish for stocks.

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.

TECS - S&P Technology Select Sector 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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