Breaking News
Get 40% Off 0
Is NVDA a 🟢 buy or 🔴 sell? Unlock Now

“Steady As She Goes” Stock Market (and Sentiment Results)…

By Thomas HayesMarket OverviewSep 07, 2023 10:09AM ET
www.investing.com/analysis/steady-as-she-goes-stock-market-and-sentiment-results-200641664
“Steady As She Goes” Stock Market (and Sentiment Results)…
By Thomas Hayes   |  Sep 07, 2023 10:09AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

“Steady As She Goes” Stock Market (and Sentiment Results)…

SPDR S&P 500 ETF
SPDR S&P 500 ETF

So what’s ailing the market? On August 18, there were big headlines that a “major manager” had just put a huge short on bonds – expecting yields to blow out. On our podcast|videocast that day we said that this particular hedge fund manager probably called the bottom in bonds and the top in rates by “shorting in the hole” one of the most crowded trades in history.

With the exception of one day, yields have stayed below the level when the “big announcement” was made. We anticipate that will persist and it has broad ranging implications – which we discussed in extensive detail on our three media appearances this week.

CBOR 10-Year US Treasury Yield
CBOR 10-Year US Treasury Yield

The blue horizontal line represents the day the headlines hit that the “major manager” announced his bond short. If you look at the black line – which represents TLT (20yr treasury ETF) – you’ll see that it was a near bottom tick. Perhaps this manager will turn out to be correct, but we’re going to take the other side of this crowded trade by burdening ourselves with the facts. The facts are that when everyone is thinking alike, they are probably not thinking:

10 Year Note
10 Year Note

The red line represents the large traders/speculators/hedge fund managers who think they see something no one else does. The problem with this is the fact that EVERYONE is crowded short into the same trade – just like they were in 2018 before we had a monster rally in the 10yr (compression in yields). I do not expect that magnitude of a rally, but we are looking for the trend to reverse in coming weeks and months.

Fox Business

On Friday, I joined Charles Payne on Fox Business to discuss this very idea and how to benefit from it. The play is not to buy long bonds, but rather to buy those equities which have been beaten down the most due to the movement in yields – despite maintaining revenue, earnings power and cash generation. When the trend reverses in bonds, these equities will recover aggressively to intrinsic value. Thanks to Charles, Kayla Arestivo, Nick Palazzo and Haadya Khan for having me on the show:

Bloomberg HT (Turkey)

Earlier that morning I joined Ali Cinar to discuss the jobs report, the Fed and implications moving forward. We also covered emerging markets, earnings and China. Thanks to Ali for having me on:

Podcast Appearance

Yesterday I joined Patrick Weinert on his podcast to discuss in-depth our investing framework, the impact of demographics on our market outlook, and quite a number of our holdings. You can take advantage – even if you missed the live stream – by viewing here:

Update on 3M (NYSE:MMM)

3M Co
3M Co

A few of the key catalysts have come to pass over the last few weeks and 3M is beginning to make its way higher.

General Market Indications

Our indicators do not imply a “TOP” at the moment. A number of them are more consistent with a “bottom(ing)” or mid-recovery:

Equity Put/Call Ratio
Equity Put/Call Ratio

NDX 1% EMA of Advance-Decline Ratio
NDX 1% EMA of Advance-Decline Ratio

Nasdaq - Cohen High Low
Nasdaq - Cohen High Low

Nasdaq - Up Down OBV Oscillator (NBD)
Nasdaq - Up Down OBV Oscillator (NBD)

DOW IT Breadth Momentum Osc (ITEM)
DOW IT Breadth Momentum Osc (ITEM)

S&P Mid Cap IT Volume Momentum Osc (ITVM)
S&P Mid Cap IT Volume Momentum Osc (ITVM)

SPX McClellan Summation Index
SPX McClellan Summation Index

ALL INDEX % PMO Xover BUY Signals
ALL INDEX % PMO Xover BUY Signals

SPX % PMO Xover BUY Signals
SPX % PMO Xover BUY Signals

Nasdaq McClellan Summation Index
Nasdaq McClellan Summation Index

Volatility Index - New Methodology
Volatility Index - New Methodology

S&P 500 CY 2023 & CY 2024 Bottom-Up EPS 1-Year
S&P 500 CY 2023 & CY 2024 Bottom-Up EPS 1-Year

Now onto the shorter term view for the General Market:

In this week’s AAII Sentiment Survey result, Bullish Percent (Video Explanation) jumped up to 42.2% from 33.1% the previous week. Bearish Percent dropped down to 29.6% from 34.5%. The retail investor is showing renewed optimism.

Sentiment Survey Historical Data
Sentiment Survey Historical Data

AAII Bulls
AAII Bulls

The CNN “Fear and Greed” ticked up from 51 last week to 56 this week. You can learn how this indicator is calculated and how it works here: (Video Explanation)

Fear & Greed Index
Fear & Greed Index

US - CNN Fear and Greed Index
US - CNN Fear and Greed Index

And finally, the NAAIM (National Association of Active Investment Managers Index) (Video Explanation) jumped to 61.19% this week from 34.36% equity exposure last week. Guess (NYSE:GES) who sold in the hole and is having to “chase up” yet again?

NAAIM Exposure Index
NAAIM Exposure Index

This content was originally published on Hedgefundtips.com.

“Steady As She Goes” Stock Market (and Sentiment Results)…
 

Related Articles

“Steady As She Goes” Stock Market (and Sentiment Results)…

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your investing.com profile, will be public on investing.com and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email