Fed watchers and prognosticators continue to lather on about whether the Fed is behind the curve and whether it should cut 25 basis points (bps) or 50bps on 9/18/24. At Day Hagan, we rely on our models and charts, not opinion, for guidance.

The Catastrophic Stop model currently sits at 55.7%. The Internal and External composites are neutral.

Despite favorable trend and breadth evidence, we recognize that seasonality may introduce periods of weakness as September progresses. Our immediate focus will be on the market’s reaction to tomorrow’s employment report and the FOMC decision slated for 9.18.24. We remain focused on risk management at current levels.

The Portfolio continues to invest in companies producing excess returns through positive economic profitability, supported by solid balance sheets (quality), significant cash generation (profitability), and trading with considerable margins of safety (valuation). We believe these factors will continue to provide rational opportunities for the foreseeable future.

The Catastrophic Stop model combines time-tested, objective indicators designed to identify high-risk periods for the equity market. The model declined toward the end of August but entered September with a fully invested equity allocation recommendation.

The Catastrophic Stop model combines time-tested, objective indicators designed to identify high-risk periods for the equity market. The model declined toward the end of August but entered September with a fully invested equity allocation recommendation.

The Catastrophic Stop model combines time-tested, objective indicators designed to identify high-risk periods for the equity market. The model (Figure 1) declined toward the end of August but entered September with a fully invested equity allocation recommendation.

The Catastrophic Stop model held steady at 48.6%. The Internal and External composites are neutral.

Following the “Powell Pivot” last week, Wall Street continued to favor the Non-Index Movers (non-growth/technology/value type) over the Index Movers (large cap growth/technology). Consequently, we have a lot to focus on.

The Catastrophic Stop model held steady at 48.6%.  The Internal and External Composites are neutral.

Despite the equity market rally, which went up faster than expected, the S&P 500’s uptrend is intact but overbought (condition, not a signal). For 2024 the Catastrophic Stop model has been positive, and we are aligned accordingly. If our models shift bearish, we will raise cash.

The Catastrophic Stop model declined to 48.6% from 53.6% last week. The Internal and External composites are neutral.

The market might retest last week’s lows after its rebound, but with the upcoming economic data and potential developments in the news cycle this week, it’s difficult to predict which way it will go.

The Catastrophic Stop model declined slightly to 53.6% from 60.7% last week. The Internal and External composites are neutral.

Wall Street experienced its own version of Hurricane Debby due to sector and stock rotation, position unwind, seasonal headwind, economic and EPS growth concerns, geopolitical concerns, machine trading, liquidity concerns, and widening credit spreads (Figure 1).

The Portfolio continues to invest in companies producing excess returns through positive economic profitability, supported by solid balance sheets (quality), significant cash generation (profitability), & trading w/ considerable margins of safety (valuation). We believe these factors will continue to provide rational opportunities for the foreseeable future.

We are monitoring economic growth closely, as that is the driving force behind the recent decline (among myriad other factors). The quantitative, unemotional outlook confirms that economic growth is decelerating but still positive overall. Inflation pressures continue to diminish. The model is positive, and we are aligned with the message. If our models shift to bearish levels, we will raise cash.

The Catastrophic Stop model combines time-tested, objective indicators designed to identify high-risk periods for the equity market. The model held steady during July and entered August with a fully invested equity allocation recommendation.

The Catastrophic Stop model combines time-tested, objective indicators designed to identify high-risk periods for the equity market. The model held steady during July and entered August with a fully invested equity allocation recommendation.

The Catastrophic Stop model combines time-tested, objective indicators designed to identify high-risk periods for the equity market. The model held steady during July and entered August with a fully invested equity allocation recommendation.