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Lawmakers in both the House and Senate are set to return to Capitol Hill on Monday afternoon, with less than two weeks to hash out some sort of deal to fund the government past Sept. 30.

If Congress can’t agree on spending priorities for the next fiscal year, or at least on a stopgap spending patch known as a continuing resolution (CR) to extend the current year’s funding, they risk sending the government into a partial shutdown. 

Some GOP groups are discussing a 30-day stopgap CR with some border security measures attached, multiple sources told Fox News Digital.

One senior GOP aide told Fox News Digital that they believe a shutdown is likely but dismissed the notion it would be long term.

‘It might just be that you know, we’re getting close to the deal in the nth hour and it shuts down because it’s Saturday, when this all starts happening. It might be shut down over a weekend, open up on a Monday, that would be a shutdown, technically,’ a senior GOP aide told Fox News Digital on Friday. ‘I don’t think anyone can tell you right now with any degree of certainty that it’s going to be a month-long shutdown.’

Sept. 30, the end of fiscal year 2023, falls on a Saturday this year.

Last week, plans to pass spending bills in both chambers of Congress were upended by conservative concerns. 

In the House, a planned vote on the defense appropriations bill — the second of 12 that House GOP leadership have promised to pass in place of a large ‘omnibus’ spending bill that many Republicans oppose — was scuttled after it became clear that members of the House Freedom Caucus and their allies would not let it pass over their concerns with the spending process.

Meanwhile, the Senate, where spending has so far been a widely bipartisan topic, was stopped from advancing a ‘minibus’ bundling the appropriations bills for Veterans Affairs, agriculture and transportation by lawmaker objections led by Sen. Ron Johnson, R-Wis. 

It’s caused discord within both chambers, particularly in the House, where GOP defense appropriators held a press conference on Friday fuming at Republicans holding up the military’s spending bill.

‘You may have issues with policies in other agencies, but if you oppose the rule, which is effectively preventing this bill from moving forward, and if you oppose the passage of this bill, you are enabling the failed defense policies and this of this administration and accelerating the downward trajectory of our nation’s security,’ said Rep. Mike Garcia, R-Calif. ‘And I don’t envy the person that… votes against this bill when they have to explain to their constituents, and more importantly, to our troops.’

Garcia also voiced opposition to a CR, as he and other defense hawks argue it delays valuable military progress.

But Republican and Democrat leaders in both chambers acknowledged last month that a CR would be necessary to buy lawmakers more time to make a deal. Both the 175-member Republican Study Committee and the hardliner conservative House Freedom Caucus have signaled they will oppose a CR that does not include key GOP policy items.

However, as of Friday afternoon, it appeared the Republican factions are forging ahead with a CR plan without House leadership. Reps. Dusty Johnson, R-S.D., and Stephanie Bice, R-Okla., leaders of the Main Street Caucus, said on Thursday evening, ‘The Republican Main Street Caucus and the House Freedom Caucus are working together in good faith to establish a plan to lower spending, secure the border, and avoid a government shutdown. The talks have been productive and we’ll continue to work toward a deal.’

A source familiar with the talks confirmed to Fox News Digital on Friday that the two groups are working toward a CR whose ‘major contours’ include 30 days of government funding plus core parts of the House GOP’s border security bill.

Those talks are between the Main Street Caucus and Freedom Caucus only, the source said when asked if GOP leaders were involved.

Another Republican aide familiar with the talks told Fox News Digital that GOP leaders are aware of them but allowing the members to sort it out themselves. Leadership is offering them technical support where necessary, the aide said.

The aide said lawmakers are currently debating whether to add disaster relief as well. However, it’s highly unlikely that anything other than a ‘clean’ CR would pass the Democrat-controlled Senate.

Speaker Kevin McCarthy vowed that lawmakers would not leave this week until some kind of spending agreement is passed.

‘We’ve got another week. I’ve told my members that when we come back in, don’t plan on leaving, we’ve got to get business done. History has shown no one wins a shutdown,’ McCarthy said Friday.

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Ukrainian President Volodymyr Zelenskyy is expected to make his second trip to the United States Tuesday, 18 months since the start of the war in Ukraine, as more Republican lawmakers question additional American assistance amid Kyiv’s slow-moving and inconclusive counteroffensive.

Zelenskyy will come to New York and speak before the 78th opening of the United Nations General Assembly where he is expected to pitch himself before developing nations who have swayed in allegiance toward Russia, the New York Times reported. 

President Biden also will be in New York through Wednesday, National Security Adviser Jake Sullivan confirmed at a White House press conference Friday.

‘[Biden’s] eager to use this trip to advance U.S. interests on a range of issues from mobilizing financial resources for the global south for development and infrastructure, to galvanizing cooperation to tackle the climate crisis, to strengthening global support for Ukraine sovereignty and territorial integrity as it defends itself against Russia’s brutal invasion,’ Sullivan said.

Ukraine’s president will also travel to Washington, D.C., to meet with congressional leadership and visit the White House. 

Sullivan said Biden will host Zelenskyy during what will be their third meeting at the White House as ‘Russia desperately seeks help from North Korea for its brutal war in Ukraine as Ukrainian forces continue to make progress in their counteroffensive and just after the next Ukraine defense contact room meeting that Secretary [of Defense Llyod] Austin is organizing with dozens of our allies and partners in Europe earlier next week as we continue to coordinate the provision of arms and equipment to help Ukrainian forces.’

Zelenskyy’s visit comes as Congress considers Biden’s latest request for $24 billion in added military and humanitarian aid for Ukraine. The Times reported that Zelenskyy is expected to shift the tone of his messaging after he was criticized for scolding his allies and appearing ungrateful as he demanded more weapons from them. 

At the NATO summit hosted in Vilnius, Lithuania, in July, the then-British defense minister Ben Wallace remarked, ‘Like it or not, people want to see a bit more gratitude.’ At the same summit, Sullivan publicly agreed that ‘the American people do deserve a degree of gratitude’ for ammunition, air-defense systems, armored vehicles and mine-clearing equipment.

Biden’s address to the UN Tuesday will lay out the ‘steps he and his administration has taken to advance a vision of American leadership that is built on the premise of working with others to solve the world’s most pressing problems,’ Sullivan said Friday. This comes on the heels of Biden’s trip to the G-20 summit.

Meanwhile, six Ukrainian deputy defense ministers were fired Monday following the dismissal two weeks ago of Defense Minister Oleksii Reznikov in a corruption scandal, officials said, as heavy fighting continued in the east. Deputy defense ministers including Hanna Maliar, Vitalii Deyneha and Denys Sharapov, as well as state secretary of the Ministry of Defense Kostiantyn Vashchenko, were fired, according to the Telegram account of Taras Melnychuk, permanent representative of the Cabinet of Ministers.

Melnychuk provided no explanation of the firings, but the government has been investigating accusations of corruption in the military related to purchasing equipment, according to the Associated Press. Rustem Umerov, a Crimean Tatar lawmaker who took over as defense minister, did not immediately issue a statement.

The Associated Press contributed to this report. 

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RRG sending a clear message

The Relative Rotation Graph above shows the rotation for the combined Size and Growth/Value segments in the market.

And the message is pretty clear.

First of all, there are NO tails inside the leading- and no tails inside the lagging quadrant. That suggests that a big rotation is underway. This observation is supported by the second observation. This is the fact that all blue tails inside the improving quadrant are in the process of rolling over. On the opposite side, the orange tails inside the weakening quadrant are all (three of them) starting to curl back up, or close to it.

We know that rotations that complete on either the right- or the left-hand side of the RRG are characteristic of a very strong relative up- or downtrend. And that seems to be the case at the moment.

Growth vs. Value

When we break down this universe into its growth and value segments we can see the isolated rotations for growth vs. value. After a counter-trend move with value picking up relative momentum and growth losing relative momentum, these tails are now starting to roll back up/down. Given the current distance from the 100 level on the RS-Ratio scale, growth on the positive side, and value on the negative side, there is enough “room” for the market to continue its rotation in the current direction. That will bring growth back up towards the leading quadrant and push value back into the lagging quadrant.

Large-Mid-Small

When we do the same for the size segment, again we see that rotation, isolated, and magnified.

Mid- and small caps are inside the improving quadrant and starting to roll over and move back down to lagging. Large caps are inside the weakening quadrant and have already started to curl back up and move toward the leading quadrant.

Merging these two RRGs gives us the RRG at the top of this article which sends a pretty clear message, pointing to Large-Cap-Growth as the best segment in the market for the time being.

US Large-Cap Growth

The price chart for US Large Cap Stocks ($DJUSGL) is still well within the boundaries of its rising trend channel. Three weeks ago $DJUSGL tested horizontal resistance near 5780. This level has been in play since September 2021 and showed up as either support or resistance multiple times which makes it a level to watch.

Once this barrier can be cleared, new upside potential will be unlocked, targeting the all-time high levels which were set at the end of 2021 around 6100 giving us a 5.5% upside potential.

From a relative perspective, raw RS is moving sideways after a nice run-up since the start of the year. This consolidation is causing the RRG-Lines to drop back and bring RS-Ratio down from its highest level over the last three years. With RS-Momentum below 100 but already leveling off and ready to start moving higher, this positions the tail for $DJUSGL inside the weakening quadrant and curling back up. Ready to complete a rotation on the right-hand side of the RRG, as we know one of the strongest setups and the start of a new up-leg in an already rising (relative) trend.

#StayAlert and have a great week, –Julius

Sunday/Monday I will be traveling back from Redmond, WA to Amsterdam. So a new episode of Sector Spotlight will be recorded later in the week.

Republican presidential candidate Vivek Ramaswamy responded to polling that shows his unfavorability rising, with one commentator saying Americans find him ‘annoying’ on Sunday.

Ramaswamy responded to the polls during an appearance on ‘Fox News Sunday’ with host Shannon Bream. Bream cited a Fox News Poll showing that unfavorable views of Ramaswamy have risen 12% since August.

”Of all the descriptors attached to Vivek Ramaswamy, the 38-year-old political tyro enjoying a bizarre surge in the Republican primary race for second place, the most common one seems to be ‘annoying,’’ Bream quoted from an opinion article.

‘Why do you think, as more people have gotten to know you, that your unfavorables are up too?’ she asked.

‘We have been taking intense criticism, Shannon, over the last several weeks since I performed well on that second debate, and this is part of the process,’ Ramaswamy said.  ‘So I invite the open debate.’

‘The reality is many people are annoyed by my rise and believe that a 38-year-old is too young to be U.S. president,’ he added. ‘The fact of the matter is that Thomas Jefferson was 33 years old when he wrote the U.S. Declaration of Independence. He also invented the swivel chair while he was at it, by the way.’

Ramaswamy remains in third place behind Florida Gov. Ron DeSantis and former President Donald Trump. Trump maintains a commanding lead over the rest of the GOP field, however.

Ramaswamy insists his campaign is on a path to success, however, pointing to his surge in support over the past several weeks.

‘We came from 0.0% to where we are now,’ he told Bream. ‘I think we’re on track to win this election.’

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Former President Donald Trump has lashed out against President Biden’s repeated false claims over the past few weeks, including the Democrat’s latest gaffe about 9/11. 

‘Look at all the lies he’d told,’ Trump told NBC’s ‘Meet the Press’ host Kristen Welker in his first network news interview since leaving office aired Sunday. 

‘Look at all the lies he’s told over the past couple of weeks. He said he was at the World Trade Center, and he wasn’t,’ Trump said. ‘He said he flew airplanes. He didn’t. He said he drove trucks, and he didn’t. Everything he says is like a lie. It’s terrible.’ 

 Trump added that Biden claimed to have a golf handicap of six, which means he shoots six over par on average – an impressive score for a non-professional. 

‘He’s not a six,’ Trump added over Welker’s interjection. 

Welker, who newly took over the program from former host Chuck Todd, said she wanted to focus on Trump, not Biden, during the interview because ‘it’s important that we hear from you.’ 

‘Well, I’d like you to, but you keep interrupting me,’ Trump said. 

At a 9/11 remembrance event at a military base in Alaska last week, Biden falsely claimed that he visited Ground Zero the day after the terrorist attacks on the Twin Towers in New York City. By contrast, Trump did visit Ground Zero days after the 2001 attacks, as evidenced in archived photos taken in Manhattan. 

National Security Council spokesperson John Kirby avoided a question about 80-year-old Biden’s 9/11 gaffe last week. 

‘In the past couple of weeks, the president has lied about being at Ground Zero the day after the Sept. 11 attacks, falsely claimed he saw the Pittsburgh bridge collapse, claimed his grandfather died in the hospital days before his birth,’ The Washington Times reporter Jeff Mordock posed during a White House press briefing. ‘What is going on with the president? Is he just believing things that didn’t happen, did happen? Or is he just randomly making stuff up?’

‘The president was deeply touched and honored to be able to spend 9/11 with military members there in Alaska and some families,’ Kirby said in response. ‘And he spoke about a visit to Ground Zero, which he did participate in about a week or so after the event. And what that looked and what that smelled and what that felt like. And it has visceral impact on him as it did so many other Americans on that terrible day. And he’s focused on making sure that an attack like that never happens again.’  

Last week, House Speaker Kevin McCarthy, R-Calif., launched an impeachment inquiry into Biden’s conduct. 

White House press secretary Karine Jean-Pierre was seen walking off during her daily briefing when a member of the press pool asked her to respond to a recent poll suggesting 61% of Americans believe Biden lied about his alleged involvement in the business dealings of his son, Hunter Biden. 

In the interview Sunday, Welker also asked Trump, ‘Mr. President, tell me what you see when you look at your mugshot.’

‘I see somebody that loves this country in me. That loves this country,’ Trump began. ‘I see tremendous unfairness. I think very few people would have been able to handle what I handled.’

In the case related to Mar-a-Lago, Welker asked Trump about a new charge alleging the former president asked a staffer to delete security camera footage so it wouldn’t get into the hands of investigators. Trump’s response criticized the Justice Department’s Special Counsel Jack Smith. 

‘False,’ Trump said, agreeing he would testify to that under oath. ‘It’s a fake charge by this deranged lunatic prosecutor who lost in the Supreme Court 9 to nothing, and he tried to destroy lots of lives. He’s a lunatic, so it’s a fake charge, but, more importantly, the tapes weren’t deleted. In other words, there was nothing done to them. And, they were my tapes.’ 

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Former Vice President Mike Pence reacted to a pair of gaffes from former President Donald Trump on Sunday, as conversation around the age of the Republican and Democratic frontrunners ramps up.

Pence appeared on CNN’s ‘State of the Union’ with host Jake Tapper on Sunday. Tapper pressed Pence to respond to two instances of Trump appearing confused during public events, asking whether the GOP frontrunner should be facing the same scrutiny as Biden.

Tapper played a clip of a speech in which Trump appeared to confuse former President Barack Obama and President Biden before launching into his question.

‘In addition to seeming to have confused Obama and Biden, the president, the former president, also went on to say that re-electing Joe Biden would lead to World War II, which, of course, is a war that already happened,’ Tapper said.

‘If Joe Biden had made comments like that, Republicans would be all over it, talking about his age, his mental fitness, his sharpness, his acuity. The DeSantis camp has already tweeted that clip out. You have said that, in your view, Biden has lost a step. Do you think that 77-year-old Donald Trump has lost a step as well?’ he asked.

‘Well, I didn’t hear the speech, so I’d leave it to judgments of others,’ Pence began. ‘But, look, I have said very clearly we don’t need a president who’s too old and we don’t need a president who’s too young. I’m in this race because I believe that I will bring the experience, the energy, and the commitment to a consistent conservative agenda that’s going to be necessary to turn around the failed policies of the Biden administration that have weakened us at home and abroad.’

‘When Donald Trump ran for president in 2016, he promised to govern as a conservative. For four years, we did govern as conservatives, but, today, Donald Trump makes no such promise,’ he added.

Biden, 80, is the oldest person ever to run for U.S. president, followed closely by Trump, 77. Trump himself came out against strict age limits in the U.S. on Sunday, but he did speak in favor of mental competency tests.

‘You know, I took a test two years ago, three years ago. And as the doctors said – and it was in front of doctors and a whole big deal at Walter Reed, which is an incredible place. And I aced it. I get everything right. I’m all for testing. I frankly think testing would be a good thing,’ Trump told NBC News on Sunday.

‘[You] know, some of the greatest world leaders have been in their 80s. I’m not anywhere very near 80, by the way,’ Trump claimed. ‘I don’t think Biden’s too old, but I think he’s incompetent, and that’s a bigger problem.’

Trump would turn 80 years old within 18 months of gaining office if he wins re-election. Meanwhile, Biden would be 82 at the start of his second term.

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Sen. Bernie Sanders, I-Vt., praised automobile workers who are striking against their corporate employers on Sunday, saying the workers are suffering from ‘corporate greed.’

Sanders made the statement during a Sunday morning appearance on CNN’s ‘State of the Union’ with host Jake Tapper. The United Auto Workers (UAW) strike against the ‘Big 3’ automakers – Ford, GM and Stellantis – reached its third day on Sunday.

‘Sen. Sanders, Vice President Pence was on the show earlier. He said, when I asked him about the fact that the CEOs make multiples more than their average workers, 362 times more in the case of Ford – I said, do you think that’s fair? He said CEO pay is up to free enterprise. It’s up to shareholders, not the government,’ Tapper said. ‘What’s your response?’

‘I strongly disagree,’ Sanders began. ‘The American people are sick and tired, in my view, Jake – and I have been all over this country – they are sick and tired of corporate greed, in which the very richest people are becoming richer. The head of General Motors now makes $29 million a year, and yet, if you go – if you’re a new worker in the Big Three, you make less than $17 an hour.’

‘So what you’re seeing in the automobile industry, in my view, is what we’re seeing all over this economy, greed on the top, suffering on the part of the working class. And people are tired of it,’ he continued.

Sanders went on to support UAW’s push for a four-day workweek, arguing that the introduction of artificial intelligence will soon boost the productivity of individual workers.

‘I happen to believe that, as a nation, we should begin a serious discussion – and the UAW is doing that – about substantially lowering the workweek. People in America are stressed out for a dozen different reasons,’ Sanders said. ‘And that’s one of the reasons why life expectancy in our country is actually in decline. People are overwhelmed. They got to take care of their kids. They got to worry about health care. They got to worry about housing. They’re worried.’

‘It seems to me that, if new technology is going to make us a more productive society, the benefits should go to the workers,’ he said.

Sanders joined UAW members on the picket line in Detroit on Friday. In addition to shorter workweeks, the union is demanding higher wages and better retirement benefits.

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Former President Donald Trump argued in his first network interview since leaving office that former Speaker of the House Nancy Pelosi ‘is responsible for Jan. 6.’ 

‘Nancy Pelosi was in charge of security. She turned down 10,000 soldiers. If she didn’t turn down the soldiers, you wouldn’t have had Jan. 6,’ Trump told NBC’s ‘Meet the Press’ host Kristen Welker during a recent sit-down interview at Trump’s golf club in Bedminster, New Jersey. 

Trump declined to answer if he called military or law enforcement that day, saying, ‘I behaved so well, I did such a good job, Nancy Pelosi turned down 10,000 soldiers… if she didn’t do that…’ Welker challenged Trump that Pelosi did not have the authority he had as commander in chief.

‘I understand that the police testified against her, the chief very strongly against her, the Capitol police, great people,’ Trump said in the interview aired Sunday. ‘They testified against her, and they burned all the evidence. OK? They burned all the evidence. They destroyed all the evidence about Nancy Pelosi.’ 

‘She has authority over the Capitol,’ Trump added. ‘National Guard not coming? I asked her [for them] to be there three days in advance, and she turned it down.’ 

‘She says that that request was never officially made,’ Welker, who newly took over the NBC program from former host Chuck Todd, interjected. 

‘The mayor of D.C. gave us a letter saying that she turns it down. OK, we have it. Nancy Pelosi also was asked, and she turned it down. The police commissioner of Capitol police…’ Trump continues, as Welker interrupts him. ‘Wait, a minute,’ he pressed on, ‘Capitol police said that he wanted it, and Nancy Pelosi wouldn’t accept it. She’s responsible for Jan. 6.’ 

‘Nancy Pelosi’s responsible, and the Jan. 6 committee refused to interview her,’ he said. 

‘As our office has said before, the former president’s allegations are completely made up,’ a representative for Pelosi told Fox News Digital, reacting to the interview. 

‘As numerous independent fact-checkers have confirmed, Speaker Pelosi did not plan her own assassination,’ the spokesperson added. 

The decision on whether to call National Guard troops to the Capitol is made by what is known as the Capitol Police Board, which is made up of the House sergeant at arms, the Senate sergeant at arms and the architect of the Capitol. The board decided not to call the guard ahead of Jan. 6 but did eventually request assistance after the rioting had already begun, and the troops arrived several hours later, according to The Associated Press. 

The House sergeant at arms reported to Pelosi and the Senate sergeant at arms reported to Sen. Mitch McConnell, a Republican who was then Senate majority leader. 

The officials on the board, along with the former Capitol Police Chief, Steven Sund, have disputed each others’ accounts of who requested the guard when. Both sergeants at arms and the police chief resigned immediately after the attack. The Democrat-led Jan. 6 House committee never subpoenaed Pelosi. 

Sund claimed to The Washington Post in an interview that he requested assistance six times ahead of and during the attack on the Capitol, but each of those requests was denied or delayed. He claimed House Sergeant-at-Arms Paul Irving was concerned with the ‘optics’ of declaring an emergency ahead of the demonstrations and rejected a National Guard presence.

‘Mr. President, you have authority as commander in chief that no one else has. Do you think you showed leadership on that day?’ Welker asked Sunday. Trump said, ‘Yes, absolutely, I did.’ 

Trump insisted he could have pardoned himself before leaving office to avoid ‘fake charges’ and ‘Biden indictments’ he’s facing now, but ‘that’s the last thing I would have done.’ 

‘They want to arrest their political opponents. Only Third World countries do that, banana republics,’ Trump said. ‘I was given the option; I could have done a pardon of myself. You know what I said? ‘I have no interest.’’

Trump also disputed the ‘ridiculous’ claim made by former White House aide Cassidy Hutchinson before the Jan. 6 committee that he allegedly grabbed a Secret Service agent by the neck and demanded to head to the Capitol. He refused to tell Welker how he watched the Jan. 6 riot unfold, vowing to tell people at a later time. Outside the Oval Office on Jan. 6, 2021, Trump told people to go home and praised police, the former president himself recalled in the NBC interview, but Welker noted that came hours after the riot began.

The Associated Press contributed to this report.

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Rep. Nancy Mace, R-S.C., defended the impeachment inquiry into President Biden during an interview Sunday, arguing that the ‘facts are everywhere.’ 

During an appearance on ABC’s ‘This Week,’ host Jonathan Karl asked Mace if she believed it was premature for House Speaker Kevin McCarthy, R-Calif., to launch an impeachment inquiry without a vote. Karl cited an op-ed published in the Washington Post by Mace’s Republican colleague, Rep. Ken Buck, R-Colo, who wrote, ‘Trump’s impeachment in 2019 was a disgrace to the Constitution and is a disservice to Americans. The GOP’s reprise in 2023 is no better.’

‘I don’t believe so,’ said Mace, a member of the House Oversight Committee. ‘The facts are everywhere. There are text messages, there are emails, there are witnesses, there are whistleblowers, there are meetings, there are phone calls, there are dinners. And you can’t say, ‘Hey, there’s a little bit of smoke, we’re not going to follow the fire.’ And the inquiry, my understanding is, as you said earlier, gives us expanded subpoena powers. I want the bank records of Joe Biden. All of that should be on the table to prove out the allegations in the SARS reports. We’re talking about a significant sum of money. We are talking about bribery. And in the Constitution, Article 2, Section 4, that is the basis for impeachment.’

Karl interjected, saying there is no evidence connected to Biden, but Mace rejected the notion. 

‘There is evidence. You can’t say that there’s no evidence there when there is evidence,’ Mace said.

‘It was the fourth estate. It was the media and journalists when Nixon was going down that helped do that investigation, helped bring down the president when they – when he broke the law,’ she said. ‘And, you know, you guys want to deny that there’s evidence. It’s everywhere.’

In announcing the impeachment inquiry, McCarthy listed allegations of ‘abuse of power, obstruction and corruption,’ which have made against Biden by several Republican-led committees that have been investigating the president, and said the investigations found that Biden ‘did lie to the American people about his own knowledge of his family’s foreign business dealings.’

‘Eyewitnesses have testified that the president joined on multiple phone calls and had multiple interactions, dinners resulted in cars and millions of dollars into his [son] and his son’s business partners,’ McCarthy told reporters.

Earlier in the interview, Mace also refused to say whether or not she’d support a motion to remove McCarthy as speaker.

Rep. Matt Gaetz, R-Fla., threatened to bring a motion to oust McCarthy if he does not follow through on a series of demands from the House Freedom Caucus on spending and legislation. McCarthy told Fox News’ Maria Bartiromo on ‘Sunday Morning Futures’ that a motion to vacate his speakership would only give Biden what he wants and shut down the House, and effectively, the impeachment inquiry into the president.

‘It hasn’t happened yet, and I’m not going to … comment on conjecture here. Either he’s going to file it or he’s not. If he’s going to do it, put his money where his mouth is. I do hear that some votes might be up for grabs because people were made promises that have not been kept,’ Mace said Sunday of the possible motion.

‘Quite frankly, a lot of promises were made. It’s not just to the Freedom Caucus but to other members of the House. And those promises ought to be fulfilled,’ she said. ‘Everything’s on the table at this point for me because I want to do the right thing for the American people, I want to do the right thing for women. I’m trying to show: Here’s a path forward for women post-Roe for birth control, for women who are rape survivors, etc. My district is no stranger to gun violence, to mass shootings.’

‘We ought to be able to work hard for the American people and show them that. And here we are facing a government shutdown and … really, what have we accomplished this year?’

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If your gut is telling you that something big is brewing in the markets, don’t ignore it.

The relationship between interest rates and stocks is about to be tested, perhaps in a big way. Observe the tightening of the volatility bands (Bollinger Bands) around the New York Stock Exchange Advance Decline line (NYAD) and the major indexes. This type of technical development reliably predicts big moves.

Now that CPI and PPI are out of the way, investors are fretting about the Fed meeting on September 19-20. The fear, of course, is that the potential reacceleration of inflation, as implied by a reviving of the CPI and PPI numbers, will lead the central bank to raise interest rates again.

The outcome of the meeting is anyone’s guess. The European Central Bank recently raised rates, but hinted that it may be done with its hiking cycle. China’s central bank seems to be at the start of a new lower rate cycle in order to boost its economy. The real arbiter may be the U.S. Treasury bond market. And the place where a lot of the action may take place once bonds decide what to do next may be the large-cap tech stocks. Think QQQ.

First, let’s look at bonds.

Are Bond Yields About to Make a Big Move Up?

Bond yields are on the verge of breaking above long-term resistance. Such a move, if it happens, would likely be meaningful for all markets; stocks, commodities, and currencies.

On the one hand, the most recent CPI and PPI numbers suggest inflation may be reviving. On the other, the anecdotal data, such as the Fed’s Beige book, ISM, and PMI data, paint a picture of a sluggish economy, or at least one that is not growing too rapidly. Recent data from the University of Michigan reports declining inflationary expectations from the public. Other data points vary widely on a monthly basis. The Wall Street consensus view is that we have stagflation, the combination of a stalling economy and simultaneously rising inflation.

Bonds hate inflation. But the response of bond yields to the most recent inflation numbers was not particularly scary. This suggests that at least some traders are starting to wonder if the odds of a stalling economy aren’t higher than those of one with runaway inflation.

A long-term examination of the value of TNX offers a glimpse into the importance of the moment. The reference point is the recent high in the U.S. Ten Year Note yield (TNX) of 4.37%, reached on 8/23/23. The previous high was 4.28%, reached on 10/22.

As of 9/15/23, despite signs that inflation may be rekindling, bond yields have not broken above the 10/22 highs. When this trading range is decided, up or down, the ramifications for the stock market will range far and wide.

QQQ is Poised for a Big Move

A natural place to look for big moves in response to interest rate trends is the interest-rate sensitive areas of the market. This includes homebuilders, real estate investment trusts (REITS), and utilities. I cover real estate, and housing in detail here.

Yet an often overlooked area which is quite sensitive to interest rates is the large-cap technology sector. Large-cap stocks matter because popular and heavily weighted S&P 500 (SPX) and Nasdaq Composite index (COMPQ) stocks, such as AAPL, MSFT, NVDA, and TSLA, are also housed in the Invesco QQQ Trust (QQQ). Given the widely held status of these stocks, when QQQ moves, the market pays attention.

Here is what’s important. First, QQQ is currently testing the important $370 price support area. If the ETF breaks below $370, it could fall to the $360 area, or even to $350. $370 is important because it is both where the 20-day moving average and a very large Volume by Price bar (VBP) reside.

VBP bars indicate price areas where bulls and bears are fighting for dominance of the trend. When prices rise or fall above these bars, it usually means a change in the trend has arrived. The combination of the 20-day and the VBP bar at $370 is a doubly important indication of that price level. A look at the Accumulation/Distribution line (ADI) shows that short sellers are not very active in QQQ. You can see a similar picture in On Balance Volume (OBV), which suggests sellers are not overwhelming buyers currently.

The take-home message is that $370 is a very important price point for QQQ. If prices fall below $370 and ADI and OBV turn lower, it will be an indication that lower prices in QQQ are likely. In addition, given the stocks that are housed in QQQ, a big drop in this ETF could spread throughout the market via their influence on major indexes.

Inside QQQ, one stock that is showing quite a bit of relative strength is Tesla (TSLA). The shares have been moving up steadily over the last month and may be ready to challenge the $290-$300 area. ADI and OBV for TSLA are also holding up.  If you’re a Tesla fan, you should read this.

One final thought; the Bollinger Bands for QQQ are closing in on current prices. This is a highly reliable predictor that a big move is coming.

Join the smart money at Joe Duarte in the Money Options.com. You can have a look at my latest recommendations FREE with a two week trial subscription. And for frequent updates on the technicals for the big stocks in QQQ, click here.

The Market’s Breadth and Major Indexes Remain in a Tight Volatile Range

The NYSE Advance Decline line (NYAD) is going nowhere, but is doing so in a volatile fashion. Over the last three weeks, NYAD has crisscrossed above and below its 20- and 50-day moving averages, but has neither broken out or broken down. The net effect is that the Bollinger Bands are tightening, as in QQQ above. And that means that a big move in the market is coming, likely affected by whatever the Federal Reserve says and does next week.

The Nasdaq 100 Index (NDX) is caught in the same type of narrow trading range as NYAD. Again, the key is the 15000 where there is a cluster of Volume by Price bars (VBP) and the 50-day moving average. Accumulation/Distribution (ADI) and On Balance Volume (OBV) remain stable.

The S&P 500 (SPX) is trading between 4350 and 4600. As with NDX, there is a cluster of VBP bars and 20- and 50-day moving averages in the area, which means this will be an active trading range.  It’s worth noting that ADI is weakening here, which suggests short sellers are moving in. OBV is holding steady, though, which means we could be setting up for another short squeeze.

VIX Remains Below 20  

VIX remains subdued below the 20 area. This is still good news, but has not had much of an effect on the market. A move above 20 would be very negative.

When the VIX rises, stocks tend to fall, as rising put volume is a sign that market makers are selling stock index futures to hedge their put sales to the public. A fall in VIX is bullish, as it means less put option buying, and it eventually leads to call buying, which causes market makers to hedge by buying stock index futures. This raises the odds of higher stock prices.

Liquidity Remains Stable

Liquidity is stable.  The Secured Overnight Financing Rate (SOFR), which recently replaced the Eurodollar Index (XED) and is an approximate sign of the market’s liquidity, just broke to a new high in response to the Fed’s move. A move below 5.0 would be more bullish. A move above 5.5% would signal that monetary conditions are tightening beyond the Fed’s intentions. That would be very bearish.

To get the latest information on options trading, check out Options Trading for Dummies, now in its 4th Edition—Get Your Copy Now! Now also available in Audible audiobook format!

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Good news! I’ve made my NYAD-Complexity – Chaos chart (featured on my YD5 videos) and a few other favorites public. You can find them here.

Joe Duarte

In The Money Options

Joe Duarte is a former money manager, an active trader, and a widely recognized independent stock market analyst since 1987. He is author of eight investment books, including the best-selling Trading Options for Dummies, rated a TOP Options Book for 2018 by Benzinga.com and now in its third edition, plus The Everything Investing in Your 20s and 30s Book and six other trading books.

The Everything Investing in Your 20s and 30s Book is available at Amazon and Barnes and Noble. It has also been recommended as a Washington Post Color of Money Book of the Month.

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