A time to put plans together..
As the market sets on its hands letting the trifecta play out,
- The House Republican game..
- The Fed Overkill game..
- And the final try at a bear market by all the players who missed the 2022-23 market bottom develop.
It is a good time to look at the various models for actions going forward. We obviously like the Climate Tech Model and concentrate our efforts there, more later this week.
Market Guru time…
In the meantime it might be good to look over the shoulder of the market guru, Jeff Gundlach, who fashions himself on CNBC as the Bond King these days, replacing Bill Gross of Pimco who ruled for years.
Last Wednesday he was interviewed after Powell’s Press conference, and said he thinks in a macro sense, a portfolio made up of 25 % Bonds, 25 % stocks, 25 % commodities, and 25 % short term money could be a good way to go now. So, we made up a chart of this kind of a portfolio in order to watch this view develop.
Here is Gundlach Trade-Day three. This may be the time to act, I think taking out the August 21, 2023 low today is significant. This may indicate the cleanout as the market sits on it’s hands waiting for the end of the House Republican game sometime in the next 30 days. Here is the short-term chart based on 2 hour bars.
And, here is a follow-up on the Economic Restriction and Economic Demand charts that we use and mentioned late last week.
It seems significant that the Economic Restriction chart is running upwards strongly the last three days. This I take as an indication the headwinds that have characterized the markets all summer are abating. At the same time it appears that the pressure that the Economic Demand chart has shown since July 23, did bottom last Friday, although the upward direction has been muted so far.
Here is the Economic Restriction Chart using 2 hour bars to illustrate short term movement.
and, here is the Economic Demand Chart using 2 hour bars to illustrate short term movement.