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Do not go gentle into that good night,
Old age should burn and rave at close of day;
Rage, rage against the dying of the light. – Dylan Thomas

The time is short. There’s always a rush. And if you are a member of Congress, you are always on the clock.

Six years in the Senate. Two years in the House. The cycle is relentless.

Lawmakers are defeated, they retire or resign. Most of them lament that they never accomplished everything they wanted in office.

That’s not because they didn’t try. The political circumstances weren’t right. The issue hadn’t ripened yet. Their proposal got left out on the parliamentary cutting room floor.

But lawmakers always grumble. No matter how long they were in office, there simply wasn’t enough time.

Politicians generally are not shrinking violets. Otherwise, they wouldn’t have gotten into this business. They can be stubborn. Unwilling to be pushed around. Plus, as lawmakers grow older, they are sprinting against the dying of the political light – be it the length of their political terms or time on this mortal coil.

That’s why recent incidents involving 81-year-old Senate Minority Leader Mitch McConnell, R-Ky., and 90-year-old Sen. Dianne Feinstein, D-Calif., pose questions about whether age and health should be a factor in someone’s fitness to serve.

How long is too long?

They may be among the most powerful leaders in America. But they are no match for the great equalizers: health and age.

McConnell froze for nearly 20 seconds at the Senate GOP’s weekly press conference recently. Other Republican senators led the Kentucky Republican away before he returned a bit later to field questions from reporters.

Feinstein appeared addled at a recent Senate Appropriations Committee meeting. Feinstein began giving a speech at the meeting – even as the committee was voting on a specific proposal. An aide appeared to try to guide Feinstein.

‘I would like to support a ‘yes’ vote on this. It provides $823 billion…’ said Feinstein before Senate Appropriations Committee Chairwoman Patty Murray, D-Wash., interrupted.

‘Just say ‘aye,’’ coached Murray.

‘OK. Just ‘aye!’’ said Feinstein, with a laugh.

Age stalks 80-year-old President Biden. Republicans routinely question the president’s age and fitness for office – especially after he tripped over a sandbag while handing out diplomas at the Air Force Academy this spring. Mr. Biden also gave meandering remarks last month while meeting with Israeli President Isaac Herzog.

‘I think that it’s legitimate to discuss the age of the president who’s running for re-election,’ said Sen. Cynthia Lummis, R-Wyo.

To be fair, Lummis also mentioned that former President Trump – now the front-runner for the 2024 Republican presidential nomination – is not exactly a spring chicken at age 77.

The White House historically dismisses concerns about the age of the current commander in chief.

‘The age comment has been out there,’ said White House press secretary Karine Jean-Pierre. ‘And what has this president done? He beat Republicans in 2020. He beat Republicans in 2022.’

As for McConnell, there are stage whispers in the Senate’s marble corridors that the minority leader isn’t the same since missing six weeks earlier this year. McConnell suffered a concussion and cracked ribs after a tumble in the restroom of a Washington, D.C., hotel.

McConnell generally speaks more quietly and with a deep rumble since returning to the Senate after the accident.

‘He should tell us if something bigger is going on,’ said Sen. Kevin Cramer, R-N.D.

McConnell appeared over the weekend at the annual ‘Fancy Farm Picnic’ in southwestern Kentucky. The fete dates back to the late 19th century. The Bluegrass State’s political royalty from both sides gives speeches and chats with voters.

When McConnell spoke, Democrats in the crowd jeered the minority leader with chants of ‘Retire! Retire!’

McConnell observed this was his 28th appearance at the Fancy Farm soiree.

‘I want to assure you it’s not my last,’ said McConnell. ‘The people of this state have chosen me seven times to do this job. I want you to know how grateful I am.’

However, McConnell has also tripped and fallen on two other occasions this year.

That’s why Senate Republicans are tiptoeing around this delicate question surrounding McConnell, his health and whoever may eventually emerge as the leader of Senate Republicans.

‘I think he’ll know when the time is right,’ said Sen. Mike Braun, R-Ind., when asked about McConnell’s future.

These health episodes trigger subtle political jockeying among those who could prospectively succeed McConnell as the Senate GOP leader.

The focus is on the ‘three Johns.’ That’s Senate Minority Whip John Thune, R-S.D., Sen. John Barrasso, R-Wyo., and Sen. John Cornyn, R-Texas. All three have leadership chops. As GOP whip, Thune stepped into the void when McConnell was absent earlier this year. One source noted that before McConnell’s injury, his office handled almost all leadership issues. But even since McConnell’s return, Thune continues to tackle a handful of leadership responsibilities.

Barrasso currently serves as the Republican conference chair, the third-highest ranking GOP slot. Cornyn served as majority whip from 2015 through 2019.

A reporter asked Thune in late July if McConnell should seek the top leadership post in the next Congress.

‘The new Congress is 18 months away,’ replied Thune, pivoting immediately to another subject. ‘I’m trying to figure out how to get the defense authorization (bill) off the floor today.’

Such a response is common for those with leadership aspirations. They want to be talked about as in the running for whenever another leader moves on – for one reason or another. But they don’t want to talk themselves about pushing to get the leadership slot. It’s an artful dance to make yourself part of the conversation – yet simultaneously not appear as though you are shoving someone out the door.

That said, time is undefeated. Nearly half of all senators are now age 67 or older. And the time for all leaders is eventually up, one way or another.

For instance, former House Speaker Nancy Pelosi, D-Calif., remains in Congress as a rank and file member. But Pelosi ceded the speaker’s gavel in January at age 82. She turned 83 this past March.

‘I believe there should be a criteria of fitness to serve of cognitive testing or cognitive assessment,’ said Dr. Mark Siegel, a medical contributor to Fox. ‘That’s what the senators owe us and that’s what should be done.’

Siegel and others raised that issue after the election of Sen. John Fetterman, D-Pa., last year. Fetterman struggles to speak and has issues processing audio after a 2022 stroke. He often uses a tablet to communicate or help him digest oral questions. Fetterman took office in January, but almost immediately took medical leave from the Senate for depression.

Despite Fetterman’s issues with audio and speaking, there’s no evidence the senator has cognitive problems.

But here’s the constitutional issue with Siegel’s proposal.

Voters may be concerned about lawmakers who are older or suffer from visible health issues like McConnell and Feinstein. But imposing other qualifications for service may be out of bounds. Article I, Section 3 of the Constitution only lists three requirements for someone to serve in the Senate. Persons must be 30 years of age, a U.S. citizen and live in the state they represent at the time of the election.

The Senate has long seen many members hang around too long.

Former Senate Majority Leader Robert Byrd, D-W.Va., Strom Thurmond, R-S.C., and Thad Cochran, R-Miss., come to mind. Byrd stepped down as majority leader in the late 1980s – yet remained in the Senate until his death in 2010 at age 92. Thurmond was still a senator when he was 100.

Siegel says he counsels people who are older yet healthy to keep working as long as they can.

‘But the problem is that the last person to know that they’re no longer functioning is usually the person themselves,’ said Siegel.

Siegel also said it’s one thing to continue to serve as senator. But it’s another enterprise to shoulder official leadership responsibilities at an advanced age. That’s why Byrd and Pelosi stepped aside.

Before McConnell’s latest episode, multiple senators remarked how he rattled off facts and figures at the closed door lunch without notes.

‘He was at the top of his game,’ said one Republican senator.

However, another GOP senator told Fox McConnell didn’t appear well on the Senate floor the day before he froze.

So it’s hard to say when is when for anyone. But once elected, voters can’t do much about it if someone is infirm or in failing health.

After all, as Dylan Thomas wrote, lawmakers are fighting ‘against the dying of the light’ from the moment they’re sworn in. A six-year term. A two-year term. So much to do. So little time.

And that same mantra applies to the rest of us, too.

Whether we serve in Congress or not.

This post appeared first on FOX NEWS

New York City Mayor Eric Adams, a Democrat, announced that a new taxpayer-funded tent city for illegal migrants will be going up in the Big Apple.

Adams announced Monday that Randall’s Island in New York City will be the new spot for the more than 57,000 illegal migrants living in the city that never sleeps.

‘As the number of asylum seekers in our care continues to grow by hundreds every day, stretching our system to its breaking point and beyond, it has become more and more of a Herculean effort to find enough beds every night,’ Adams said in a press release on Monday.

‘We’re grateful to Governor Hochul and New York state for their partnership in opening this new humanitarian relief center and covering the costs, and we need more of the same from all levels of government,’ Adams continued.

‘We will continue to work with the governor and elected officials across the state to address this crisis as New York City continues to do more than any other level of government,’ the mayor said.

Former New York Gov. David Paterson said the migrant crisis in New York City was reaching its ‘tipping point’ in a recent radio interview.

‘I think it’s at a tipping point,’ Paterson, a Democrat, said during a radio interview with business mogul John Catsimatidis on Sunday.

‘Look what happened at the hotels where the hotels were filled up,’ he said. ‘They were trying to get the excess migrants, mostly males, who couldn’t get into the hotels, and they chose to sleep on the streets instead of going to another facility,’ the former governor said.

New York City lawmakers have pleaded for help as migrants have started sleeping on the sidewalks in Midtown Manhattan. Councilwoman Vickie Paladino warned that the surge of illegal migrants is affecting New Yorkers’ quality of life and that the situation is ‘absolutely out of control.’

New York City has more than 50,000 migrants in its shelter system in what has become one of the most publicized migrant crises on the East Coast. Adams recently said that the sanctuary city has ‘run out of room’ for new migrants and even called for a ‘state of emergency’ in the city to battle the crisis.

New York lawmakers announced in June that the city would receive $104.6 million in Federal Emergency Management Agency funding for its Shelter and Services Program.

Fox News Digital’s Jeffery Clark contributed reporting.

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A final North Carolina state budget won’t be enacted until September, the House’s top leader said Monday. That could scuttle efforts by Gov. Roy Cooper’s administration for Medicaid expansion to begin in early fall.

House and Senate Republicans are whittling down dozens of outstanding spending and policy issues within a two-year spending plan that was supposed to take effect July 1.

While some big-ticket items like tax cuts and worker raises have been settled, other details remain unresolved. Add travel and vacations by rank-and-file lawmakers and the narrow GOP veto-proof majorities in the General Assembly, and House Speaker Tim Moore said the periods during which formal business can be conducted in Raleigh are limited.

Sen. Ralph Hise, a Mitchell County Republican and one of the chief budget negotiators, told reporters that votes on a budget agreement could happen in two weeks if differences can be worked out in a reasonable time. Any final budget could be vetoed by the Democratic governor, with override votes to follow.

When asked later Monday to describe the chances that a final budget could be carried out by the end of August, Moore replied: ‘Zero.’

‘Just with some absences I know that the Senate has on their side, and with just some of the logistics that have been talked about … you’re talking about a September date for actual passage — signing (the bill) into law and all that,’ Moore said.

A separate law that Cooper signed in March would expand Medicaid to potentially 600,000 low-income adults, but it can’t happen until a state budget law is enacted.

Cooper health Secretary Kody Kinsley unveiled a plan last month by which the expanded coverage could begin Oct. 1 as long as his agency received a formal go-ahead by legislators to accept expansion by Sept. 1. Otherwise, Kinsley said, implementation would be delayed until at least Dec. 1.

Legislative leaders have refused to permit the implementation of expansion without the budget’s passage, as Cooper has sought. But Moore suggested that Sept. 1 wasn’t a hard deadline.

Legislative leaders have provided few details on neither the agreed-upon pay raises for state employees and teachers nor the extent of additional individual income tax rate reductions. Moore said any pay raises would be made retroactive to July 1.

State government has benefitted in recent years from revenue overcollections, giving lawmakers the ability to spend more, borrow less and reduce tax rates.

The Office of State Budget & Management said Monday that government coffers collected $33.5 billion in revenues for the fiscal year ending June 30, or slightly over $3 billion above what had been anticipated to carry out last year’s state budget law. The total was $89 million less than was projected to be collected in a May consensus forecast by the state budget office and General Assembly staff.

Cooper and State Budget Director Kristin Walker have warned that deeper individual income tax cuts considered by GOP legislators could lead to shortfalls that could affect the state’s ability to adequately fund education.

Moore and Senate leader Phil Berger have said this year’s tax agreement contains language allowing deeper rate reductions only if the state reaches certain revenue thresholds. Berger and Moore planned more budget talks early this week, Moore said.

Moore said he still anticipated that legislators in his chamber would return to Raleigh next week to cast override votes on several vetoes that Cooper issued last month. Other non-budget business also could occur, he said.

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A group of nearly 30 House Republicans are pressing Energy Secretary Jennifer Granholm over her recently disclosed talks with a Chinese government official ahead of the Biden administration’s decision to tap emergency oil stocks.

In a letter to Granholm sent Monday afternoon, 29 Republicans led by House Energy and Commerce Committee Chair Cathy McMorris Rodgers expressed concern that the energy secretary privately consulted China National Energy Administration Chairman Zhang Jianhua, a senior member of the Chinese Communist Party, before the White House announced its first Strategic Petroleum Reserve (SPR) release.

According to internal Department of Energy (DOE) calendars obtained by Americans for Public Trust and shared last week with Fox News Digital, Granholm held private calls with Jianhua on Nov. 19, 2021, and two days later on Nov. 21, 2021. On Nov. 23, 2021, the White House announced a release of 50 million barrels of oil from the SPR.

‘We are troubled by recent reports that you, in your official capacity as Secretary of Energy, had multiple conversations with the Chinese Communist Party’s top energy official just days before the Biden administration announced it would release oil from the Strategic Petroleum Reserve in 2021,’ McMorris Rodgers and the other Republicans wrote.

‘This is concerning given the Department of Energy’s mismanagement of the SPR, which has left our country more vulnerable to energy supply disruptions and strengthened the leverage of our adversaries to use energy as a geopolitical weapon,’ the Republicans continued.

Republicans have repeatedly raised the alarm on the Biden administration’s SPR policy, noting that it has drained the critical emergency stock of crude oil while potentially giving an advantage to adversaries who have built up their reserves in the meantime.

Since November 2021, Biden has ordered the DOE to release a total of about 260 million barrels of oil stored in the SPR to combat high fuel prices hitting American consumers.

The SPR’s level has fallen to about 347.8 million barrels of oil, the lowest level since August 1983, according to Energy Information Administration data released Monday. The current level is roughly 42% lower than its level recorded days prior to the November 2021 release.

The DOE told Fox News Digital that Granholm only held one conversation with Jianhua, a 30-minute call one day before the White House announcement. The calendars reviewed by Fox News Digital do not indicate the Nov. 19, 2021, meeting was canceled.

‘When global supply fell short and prices soared, the Biden administration took decisive action. Secretary Granholm and other Administration leaders organized countries like China, India, Japan, South Korea, and the UK to follow America’s lead on oil releases, bridging the gap and giving American producers time to meet energy demands,’ a DOE spokesperson said in a statement.

‘The goal was to bring relief to families and we delivered — oil prices dropped nearly 10 percent,’ the spokesperson continued.

Gasoline prices skyrocketed after the administration’s SPR releases, hitting an all-time high in June 2022. According to AAA data, gas prices hit $3.83 a gallon Monday, nearly 13% higher than they were a day before Biden announced the first release.

In addition, the Biden administration has sold at least 2 million barrels of oil from the SPR to Unipec, an affiliate of the state-controlled China Petrochemical Corp. Jianhua, who met with Granholm in 2021, served in a leadership role for years at the China Petrochemical Corp., Reuters previously reported.

The first such sale was part of an SPR sale of 20 million barrels awarded to eight companies in September 2021. The other two — both sales for 950,000 barrels of oil — came in April 2022 and July 2022.

‘China now likely controls one of the world’s largest stockpiles of oil, at the expense of American taxpayers and our energy security,’ the Republicans continued in their letter to Granholm on Monday. ‘The Biden administration has helped support China’s national security at the expense of our own security by using our strategic energy supplies to help the Chinese build up their own strategic reserves.’

‘China poses one of the greatest economic, security, and geopolitical threats to the United States, while continuing to be one the world’s worst polluters,’ they added. ‘As a result of this administration’s war on American energy and political abuse of the SPR, Americans have become more vulnerable to true energy and national security emergencies while China has profited.’

As part of its announcement in November 2021, the White House said it was releasing oil from U.S. reserves in conjunction with ‘other major energy consuming nations including China.’

President Biden, though, said in remarks after the announcement that China ‘may do more as well,’ and Granholm told reporters during a separate press briefing that China ‘will make its own announcement.’

This post appeared first on FOX NEWS

In this episode of StockCharts TV’s Sector Spotlight, I take a look at the rotations for asset classes and sectors. The current state of the rotations in asset classes shows Bitcoin and Commodities far away from the benchmark, which could provide ample opportunities to benefit from larger moves in the coming weeks. The rotational conditions for stocks and bonds are taking place closer to the benchmark, but, all-in-all, they still seem in favor of stocks over bonds for the time being.

Zooming in on the current sector rotation within the S&P 500 index shows a distinct difference between three groups that are on the right-hand side of the RRG vs. all others on the opposite side. The opposite rotations, at the moment, are primarily (relative) momentum-driven, which can help investors to understand and anticipate the moves in stocks vs. bonds in the coming weeks.

This video was originally broadcast on August 8, 2023. Click anywhere on the Sector Spotlight logo above to view on our dedicated Sector Spotlight page, or click this link to watch on YouTube.

Past episodes of Sector Spotlight can be found here.

#StaySafe, -Julius

Looking at the Relative Rotation Graph for US sectors, the Materials sector pops up as potentially interesting while it is still inside the improving quadrant but just started heading towards leading.

When you are interested in overweight-/underweight strategies or pair trades, an interesting sector to watch for off-sets is technology. After a strong rotation through leading, this sector has now rolled over and is inside the weakening quadrant and heading towards lagging.

Hence, primarily from a relative momentum perspective (JdK RS-Momentum), they are now at opposite rotations. For both tails, it is still possible to complete a rotation without moving to the opposite side of the RRG.

Focus on Materials

For this article, I wanted to zoom in on the Materials sector, so I ran the RRG for the members.

Browsing through the tails on this plot, I isolated the ones that are on a strong RRG heading. I.e. pointing in a North-Eastern direction.

The RRG showing these selected tails is printed below.

Going over the individual charts for these stocks, I concentrated on the tails that are close to crossing over into the leading quadrant while still low on the RS-Momentum scale. They have enough potential on both scales to continue rising on both scales, which is what causes that stronger heading between 0-90 degrees.

Packaging Corp. – PKG

The first one is PKG. The tail is very close to the benchmark, but the heading is strong and pointing toward the leading quadrant, and a crossover seems imminent.

The price chart confirms the recent strength that has been showing up in this stock. After breaking overhead resistance near 143, the price is now hitting resistance between 155-160. The steepness of the recent move creates some risk for a correction, but 143 should now start to act as support.

Given the longer-term strength it is showing on the RRG and the break to 12-month highs makes, this a stock to watch. Either for entry when a new low will be put into place after a corrective move. Or when the resistance at 160 can be broken, and the stocks move to new all-time highs.

WestRock Co. – WRK

WRK has recently ended its long downtrend as it executed a reversal out of a symmetrical triangle formation.

That move ended the rhythm of lower highs and lower lows, and the initial rally following the upward break has meanwhile pushed above resistance near 33.50, which was offered by the low between the double top that formed at the end of 2022-start of 2023.

With these resistance levels taken out, the upside potential for WRK now reaches up to 37.50.

But more importantly, the downtrend in relative strength has now reversed as well. The JdK RS-Momentum line is already moving above 100 and is dragging RS-Ratio higher. Given the current strength in price, it seems only a matter of time before the tail on WRK will hit the leading quadrant.

Ideally, any low at or above 33.50 can be seen as a good entry-level to participate in a further move toward 37.50.

Nucor – NUE

And finally, Nucor. This stock is the only one out of this group that has already crossed over into the leading quadrant, ready to travel further at a strong RRG heading.

From a price perspective, all the major lows since early 2022 came in at higher levels, indicating the underlying demand for this stock. The big hurdle to be faced right now is the horizontal barrier at 175. As you can see, this is where, roughly, the horizontal overhead resistance coming from the major highs of 2022 and early 2023 is coming in. And it is also the level where the slightly falling resistance line over the extreme highs of 2022 and 2023 runs at the moment. When Nucor can take out this double resistance level, much more upside potential will be unlocked.

Relative strength has improved, and this causes the RRG lines to continue higher above 100 in tandem. But taking out the relative high of early 2023 will be the confirmation for more outperformance.

#Stayalert, –Julius

In this episode of StockCharts TV‘s The Final Bar, Dave sets the table for this week with a focus on FAANG stocks breaking down (MSFT, AAPL) vs. those still trending higher (META, GOOGL) as well as a potential rotation into financials XLF and energy XLE. He answers viewer questions on the StockCharts Technical Rankings (SCTR) as well as charts of HSY, AGCO, and more!

This video originally premiered on August 7, 2023. Click on the above image to watch on our dedicated Final Bar page on StockCharts TV, or click this link to watch on YouTube.

New episodes of The Final Bar premiere every weekday afternoon. You can view all previously recorded episodes at this link.

In this week’s edition of The DecisionPoint Trading Room, Carl opens by reviewing the “Magnificent 7+”, a.k.a. the mega-cap darlings plus Tesla (TSLA). He discusses Apple (AAPL)’s demise and later discusses possible support levels. The bias is bearish in all three timeframes, but these groups within Financials are seeing momentum and strength: Insurance. Erin, meanwhile, runs through the weakness in Technology and gives viewers some ideas on hedging.

This video was originally recorded on August 7, 2023. Click this link to watch on YouTube.

New episodes of The DecisionPoint Trading Room premiere on the StockCharts TV YouTube channel on Mondays. Past videos will be available to watch here. Sign up to attend the trading room live Mondays at 12pm ET by clicking here!

It’s summertime, and the living should be easy. Folks do tend to go away in August as the market tends to chop around on lower volume. This August proves to be no exception thus far.

What is interesting though, is looking at the reset of the July 6-month calendar ranges in 3 of the indices and one key sector. To remind you, the range is good until the next time it resets in January 2024. With nearly 3 weeks since the ranges were made, we can potentially conclude that the second half of the year will be less about growth stocks and more about small-caps.

The NASDAQ 100 (QQQ) has yet to clear the July 6-month calendar range high at 383.50. Plus, the Real Motion indicator has a bearish momentum diversion, meaning the red dots sit below the 50-DMA while the price remains above its 50-DMA. Should QQQs remain below the July range high, then the technical trade now is to watch for it to hold 368-369 or the 50-DMA. Furthermore, should that break, then the July 6-month calendar range low will be important at 363.40.

Of course, as it is August, it is also possible not much happens until September and QQQs sit in a range between 383 and 362.

As for SPY, although it is in a bit of a better chart position than the QQQs, it too sits below the July range high with momentum on its 50-DMA. Again, not a wow, but not a dealbreaker at this point.

The Russell 2000 and Retail Sector seem like the apparent places to watch for next moves. The Russell 2000 (IWM) literally dances on the July 6-month calendar range highs. 194.35 (closing basis) is key to hold, and, if it does, with stronger momentum than SPY or QQQ, the rotation into small caps and value could be the thing for the next 6 months.

However, we may still have to live through some August doldrums. Retail (XRT) could just be the deciding vote. The price is currently below 67.40 or the July high range high. Momentum, though, is better provided XRT does not fail to break below 66.00. Right now, looking at the 4 charts, we can comfortably say that risk remains on, and small caps could lead IF Retail holds. If so, then SPY and QQQs will hold as well, but the excitement could switch.

Remember, the first half was all about AI and growth. We are watching to see if the second half becomes all about value. And, in the meantime, we’re taking it relatively easy, as August heat can surely be the dog days of summer.

For more detailed trading information about our blended models, tools and trader education courses, contact Rob Quinn, our Chief Strategy Consultant, to learn more.

If you find it difficult to execute the MarketGauge strategies or would like to explore how we can do it for you, please email Ben Scheibe at Benny@MGAMLLC.com.

“I grew my money tree and so can you!” – Mish Schneider

Get your copy of Plant Your Money Tree: A Guide to Growing Your Wealth and a special bonus here.

Follow Mish on Twitter @marketminute for stock picks and more. Follow Mish on Instagram (mishschneider) for daily morning videos. To see updated media clips, click here.

Mish in the Media

In this appearance on Fox Business’ Making Money with Charles Payne, Mish and Charles cover Fed, oil and gas, and some picks for a manufacturing boom.

Mish and Nicole Petallides discuss market in correction, oil concerns, and some new picks on TD Ameritrade.

Mish runs the rule over the S&P 500 and key commodities in this video from CMC Markets.

Mish gives reasons why gold could return as a safe haven on Business First AM.

Mish talks about opportunities related to EVs in this video from Business First AM.

Mish and Jared go over oil and what might happen with small caps and regional banks in this appearance on Yahoo! Finance.

This has been a very heavy week with the Fed meeting, tons of earnings, and, not to mention, all of the geopolitical issues around the world. Something that Mish has been thinking a lot about is store houses for raw materials, the places that actually hold every kind of raw material from mining, commodity trading houses etc. Mish dives into the stocks she’s looking at on the Wednesday, July 26 edition of StockCharts TV’s Your Daily Five.

Mish looks at a selection of popular instruments and outlines their possible direction of travel in this video from CMC Markets.

In this episode of The Breakfast Show from Money FM 89.3 Singapore, Mish makes sense of the recent resilience and worrisome trends in the market, delving on the various factors driving consumer confidence in the face of rising rates and inflation, the impact of A.I.-driven companies, and the ongoing geopolitical risks on commodities and equities.

Mish talks PCE inflation picks in this video from Business First AM.

Coming Up:

August 8: Wolf Financial Spaces, 3pm ET

August 9: Mario Nawfal Financial Spaces, 8am ET

August 10:The Final Bar on StockCharts TV

October 29-31: The Money Show

ETF Summary

S&P 500 (SPY): 450 pivotal, 440 support at the 50-DMA.Russell 2000 (IWM): 191 is the 23-month holy grail, 194 July 6-month range high.Dow (DIA): 35,000 support.Nasdaq (QQQ): 362-382 range.Regional banks (KRE): 50 in focus if holds 48.Semiconductors (SMH): 161 resistance, 150 in focus.Transportation (IYT): July 6-month calendar range high at 259.30 — closed below it — caution.Biotechnology (IBB): Compression between 123-130.Retail (XRT): 66-67.40 short-term range.

Mish Schneider

MarketGauge.com

Director of Trading Research and Education

And just like that, the tech stocks are now in full distribution mode.

The bull market in stocks took a snooze to start the dog days of August, but that may be about to change, as a price trend transition with the potential for both profits and disappointments seems to be taking shape.

I’ve been bullish on the stock market since it forged a double bottom from October 2022 to January 2023. You can see for yourself here. More recently, however, I’ve been fretting about the rise in bond yields and its potential to disrupt the uptrend in stocks.

Thus I breathed a big sigh of relief when the July Nonfarm payrolls number came in below the 200,000 consensus number as bond yields throttled back their recently negative enthusiasm on 8/4/23. But, to be honest, my sigh didn’t last long, as the stock market delivered a negative intraday reversal despite the rally in bonds.

No, I’m not bipolar, although the market certainly is these days. The truth is that one of the major reasons we’ve been in an uptrend over the last few months is that bond yields have been in a mellow trading range between 3.2% and 4.1% on the U.S. Ten Year Note (TNX).

But even as bond yields fell on 8/5/23, the technology stocks, as I describe below, are under heavy selling pressure. This negative vibe could well spread throughout the whole market.

QQQ in a Short-Term Downtrend; Energy Takes the Reins

Money is rotating out the so called Magnificent Seven/AI/Microsoft (NSDQ: MSFT) axis and is moving to the energy patch as oil supplies continue to tighten.

Indeed, Microsoft has quietly broken below its 20-day moving average. And given the action in the Accumulation/Distribution (ADI) indicator, short sellers are starting to smell blood in the water. In fact, Microsoft’s weakness has influenced the price action in the Invesco QQQ Trust (QQQ), which recently failed to move back above its 20-day moving average despite a big rally in Amazon.com (AMZN). 

QQQ may remain under pressure in the short term, as both Accumulation/Distribution (ADI, increasing short sales) and On Balance Volume (OBV, buyers turning into sellers) have also rolled lower.

Meanwhile, the iShares U.S. Oil & Gas Exploration & Production ETF (IEO) moved decidedly higher as this week’s U.S. EIA oil draw of 17 million barrels may lead to a more serious supply crunch soon. This view is supported by the steady downward pace in the weekly oil rig count. Certainly, a pullback to the 200-day moving average in IEO is possible after the recent gains. But, unless something changes, such a pullback is likely to be a great dip-buying opportunity.

So, as I asked here last week; is it time to sell the tech rally? What should you do with your energy holdings? And what about the homebuilder stocks and the REITs?

The model portfolios at Joe Duarte in the Money Options.com, updated weekly, and via Flash Alerts as needed, are full of tech, homebuilders, energy stocks, and REITs. You can have a look at all of them and my latest recommendations on what to do with each individual pick FREE with a two week trial subscriptionAnd for an in-depth review of the current situation in the oil market, homebuilders and REITS, click here.

Triple Top in Bond Yields May be Forming; Could a New Up Leg in Housing be Near?

Volatile bond trading continued this week, as the U.S. Ten Year note yield (TNX) moved back inside the broad trading range it’s been locked in for the past few months. On the upside, TNX has tested the upper edge of the range between 4.1 and 4.2% three times since October.

Time will tell, but it is certainly a possible triple top. If that’s the way things work out, it may be bullish for stocks, especially interest-sensitive stocks and stocks in sectors where supplies are tight, such as homebuilders and REITs.

As the chart above shows, the most recent move took TNX above 4.1%, while the previous two moves in this trading period were at 4.2 (March 2023) and 4.3% (October 2022) respectively.

Here’s why the action in bonds matters to stock traders.

The downside reversal in TNX spawned an upside reversal in the homebuilder sector. The SPDR S&P Homebuilders ETF (XHB) rebounded after finding support at its 20-day moving average. And while this is a short-term positive, I’d like to see some confirmation from the Accumulation Distribution (ADI) and On Balance Volume (OBV) indicators before turning fully bullish on the sector again.

Details on what I’m doing with the homebuilders can be found here. But, if these positive changes are not reversed in the next few days, we may be nearing another up leg in the homebuilders.

On the other hand, the REITS (real estate investment trusts) did not react as positively to the news. The iShares U.S. Real Estate ETF (IYR) is testing its 50-day moving average. OBV suggests buyers are turning into sellers. That’s because REITS are much more sensitive to higher interest rates. As a result, I remain a bit more cautious on the REITs than the homebuilders.

NYAD Wobbles; NDX in Full Distribution Mode

The long-term trend for stocks remains up, but the short-term trend is suddenly wobbly. The New York Stock Exchange Advance Decline line (NYAD), is testing the support of its 20-day moving average even as it remains above its 50- and 200-day moving averages.

The Nasdaq 100 Index (NDX) resumed its short-term down trend last week after support at its 20-day moving average gave way. Meanwhile ADI and OBV are both pointing down as short sellers move in and buyers move out. This is a full-fledged distribution signal. ADI seems to have carved a short-term bottom while OBV is heading lower. This suggests that sellers are overtaking buyers even as short sellers are less active. Support is now at 15,000.

The S&P 500 (SPX) has broken below 4500 and its 20-day moving average. While ADI is negative, as short sellers move in, OBV has not fully broken down. SPX is holding up better than NDX because the energy and homebuilder sectors are showing some relative strength. Support is now around the 4400 area.

VIX Turns Up

I’ve been expecting a move higher in VIX, and it seems to have arrived as the index finally moved above the key 15 resistance level. This is a negative development for stocks, especially in the context of the bearish action in NDX.

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, but may not remain so for long if the current fall in stock prices accelerates. The Secured Overnight Financing Rate (SOFR), which recently replaced the Eurodollar Index (XED) but 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.

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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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