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Which nation is the leader of ‘The West?’

To answer that question you must first define what ‘The West’ is. 

There are a hundred different definitions, and indeed an entire PBS series devoted to that question. ‘Civilization: The West and the Rest with Niall Feruguson’ debuted in 2012, and the accomplished historian issued a companion book at the same time and with the same title. 

‘In ‘Civilization: The West and the Rest,’’ the summary of the book relays, ‘bestselling author Niall Ferguson argues that, beginning in the fifteenth century, the West developed six powerful new concepts that the Rest lacked: competition, science, the rule of law, consumerism, modern medicine, and the work ethic.’

Those characteristics are fine and easily applied to exclude from ‘The West’ tyrannies such as the People’s Republic of China, Russia and Iran and all of their puppet states or proxies. But it does not include the essential ingredient: freedom. ‘The West’ is defined by this essential, must-have feature: Some significant measure of individual liberty. That liberty must include the rule of law and not the rule of despots or oligarchs. There  is no rule of law where the law can be easily manipulated or avoided. There cannot be in any member nation of ‘The West’ a secret police that operates without restraint and oversight but solely on the direction of unaccountable despot(s).

The members of ‘The West’ have free elections at regular intervals and guarantee freedom of conscience, speech and almost always movement within their boundaries to their citizens. Constitutions of member states may be written as in the United States, or unwritten as in the United Kingdom. 

Nations in ‘The West’ may be large or small, rich or poor, and since the end of  World War Two at least, can be found on every continent. Countries can be part of ‘The West’ and then lose that status as has happened to Venezuela, or it can aspire and eventually join or re-join ‘The West’ as has happened with many former members of the now defunct ‘Warsaw Pact.’ Poland is one such country, as are many others surrounding Ukraine. Ukraine aspires to be part of ‘The West’ and is fighting and its people suffering and many thousands dying to keep that dream alive. Japan was a tyranny and an empire but, defeated by the Allies in 1945, it is now among The West’s leaders. 

Even as the definition becomes clearer, the first question becomes more and more difficult to answer: ‘Which nation leads the West?’ 

Until December 7, 1941, the leader of ‘The West’ was the United Kingdom, standing alone after the defeat of France by Hitler’s Germany in 1940. After Pearl Harbor, the United States was thrust into that role and has remained there without question until this decade. Until very recently in fact. 

Now, there are reasons to doubt that leadership, for the United States has failed to fulfill that role since 10/7, slipping again and again into a catastrophic ambiguity about the nature of the alliance of ‘The West,’ and at times throwing into considerable doubt whether we can be relied upon as an ally and as an enemy of tyrants and maniacs. A similar palsy overtook us in the aftermath of our loss of the Vietnam War, during the presidency of Jimmy Carter.  President Ronald Reagan cured and restored us. That palsy that marked the late 1970s in the United States has returned. 

The U.S. remains by far the wealthiest and strongest nation in the world, but it is at present divided at home and deeply confused about good and evil, friend and enemy. President Biden, already infirm and increasingly incoherent seems to be headed towards incapacity, but he is, by operation of the Constitution, the Commander-in-Chief of our supremely strong military. We cannot know what he is like in private and many Americans suspect he is not in full control of the Executive Branch. Certainly many suspect that some among our allies are concerned about his ‘leadership.’

President Biden’s infirmity and growing incoherence has indeed caused the whole world to wonder if anyone at all is in charge of the country. Of course few will say this out loud. America’s power to punish is still robust even if its president isn’t. So our allies pretend that all is fine, while our enemies plot and plan. But since the collapse in Afghanistan signaled to the world that the United States was run by a band of weak bumblers headed in title if not in fact by a very old man of limited ability, it is hard to argue that the United States is ‘leading’’anything at all these days.

If ‘The West’ as understood as the family of nations committed to everything laid out above has any leader at all right now, it seems like Israel is the only candidate qualified to step up into the vacuum left by the U.S. paralyzed by the weakness of its leadership. But Israel is also under siege on the world stage and at war with ruthless enemies, and the United States is of a divided mind about Israel, with the left wing of the Democratic Party apparently afraid that Israel might actually win and destroy the military capabilities of Hamas and perhaps after that Hezbollah. 

If the United States cannot proudly stand with Israel on the side of victory by Israel over an evil terrorist puppet of an evil theocracy, then we have to, at least for a season, given up title to leadership of ‘The West.’ Israel is the unlikeliest of all nations to become the most courageous defender of the West’s highest and best traditions, but there it is: Alone and besieged, with weak-kneed allies and an absurd world media elite that has lost any idea of why a free press matters, this nation reborn in 1958 is still very young, but it is very much a nation of warriors and however rancorous its internal politics, it has not lost sight of its purpose. 

In his introduction to a book of essays, ‘The City and Man,’ the most significant political theorist of the last century, Leo Strauss, wrote this:

‘However much the power of the West may have declined, however great the dangers to the West may be, that decline, that danger, nay, the defeat, even the destruction of the West would not necessarily prove that the West is in a crisis: the West could go down in honor, certain of its purpose. The crisis of the West consists in the West’s having become uncertain of its purpose.’

Israel is not uncertain of its purpose. America or at least its present Executive Branch quite obviously is. If there are any other nominees for the job of leading The West, by all means nominate them, or work to restore America to its former position. Until that happens, every citizen of the West looking for a nation committed to the freedom of its citizens and willing to defend that freedom at the cost of extraordinary losses of life and treasure, will need to study the example of Israel, and be willing to develop the weapons it will need to deter the enemies of freedom who have quite openly organized against ‘The West.’

Hugh Hewitt is host of ‘The Hugh Hewitt show,’ heard weekday mornings 6am to 9am ET on the Salem Radio Network, and simulcast on Salem News Channel. Hugh wakes up America on over 400 affiliates nationwide, and on all the streaming platforms where SNC can be seen. He is a frequent guest on the Fox News Channel’s news roundtable hosted by Brett Baier weekdays at 6pm ET. A son of Ohio and a graduate of Harvard College and the University of Michigan Law School, Hewitt has been a Professor of Law at Chapman University’s Fowler School of Law since 1996 where he teaches Constitutional Law. Hewitt launched his eponymous radio show from Los Angeles in 1990.  Hewitt has frequently appeared on every major national news television network, hosted television shows for PBS and MSNBC, written for every major American paper, has authored a dozen books and moderated a score of Republican candidate debates, most recently the November 2023 Republican presidential debate in Miami and four Republican presidential debates in the 2015-16 cycle. Hewitt focuses his radio show and his column on the Constitution, national security, American politics and the Cleveland Browns and Guardians. Hewitt has interviewed tens of thousands of guests from Democrats Hillary Clinton and John Kerry to Republican Presidents George W. Bush and Donald Trump over his 40 years in broadcasting, and this column previews the lead story that will drive his radio/TV show today.

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The widow of late Russian opposition leader Alexei Navalny vowed Tuesday that the rule of President Vladimir Putin will ‘definitely come to an end’ shortly before he was sworn in for another six-year term, reports say. 

Yulia Navalnaya, speaking in a video posted to YouTube months after her husband mysteriously died at an Arctic penal colony, said ‘Our country is currently being led by a liar, a thief and a murderer, but this will definitely come to an end,’ according to Reuters. 

‘Don’t give up, truth will prevail,’ she added. 

During a ceremony inside the Grand Kremlin Palace on Tuesday, Putin, who has already led Russia for 25 years, placed his hand on the country’s constitution and promised to defend it, The Associated Press reports. 

The U.S. State Department said Monday that it would not have a representative at the event. President Biden said in February that ‘Putin is responsible for Navalny’s death.’ 

Putin secured a fifth term in office in March, winning an election that featured no real opposition. 

‘We certainly did not consider that election free and fair, but he is the president of Russia and is going to continue in that capacity,’ State Department spokesperson Matthew Miller said on Monday. 

Putin had walked away with 87% of the vote, according to Russia’s election commission. He celebrated his victory over the smattering of token opposition candidates by saying at the time it was proof of the Russian people’s ‘trust’ in him. 

Russia’s election commission also reported that Putin won over 76 million votes, setting a new record. 

Putin’s latest term as Russia’s president is set to last until 2030. 

Fox News’ Anders Hagstrom and Lawrence Richard contributed to this report. 

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President Biden called Israeli Prime Minister Benjamin Netanyahu on Monday to warn him against moving on the Gaza city of Rafah.

The president reportedly warned Netanyahu against continuing with plans to invade Rafah, the last stronghold of Hamas in the region.

The two world leaders reportedly spoke for approximately 30 minutes, during which Biden raised the issue of the more than 1.5 million Palestinians currently living in Rafah.

‘The president doesn’t want to see operations in Rafah that put at greater risk the more than a million people that are seeking refuge there,’ said White House national security spokesman John Kirby.

Earlier in the day, Israel’s Defense Forces ordered an evacuation of Rafah, signaling that a long-promised ground operation could be imminent. 

The Israeli army has described Rafah as the last significant Hamas stronghold after seven months of war, and its leaders have repeatedly said clearing Rafah is necessary to defeat the Islamic militant group.

Overnight, Israeli Defense Minister Yoav Gallant told U.S. Secretary of Defense Lloyd Austin that Israel was left with no choice but to act in Rafah after Hamas terrorists carried out a deadly rocket attack from Rafah earlier in the day that left four Israeli soldiers dead.

The Israeli Defense Forces has begun conducting what it describes as ‘targeted strikes’ against Hamas operatives in eastern Rafah, a city located in the southern Gaza Strip where more than 1 million civilians from other parts of Gaza are sheltering. 

IDF spokesman Rear Adm. Daniel Hagari said aircraft struck more than 50 terrorist targets in Rafah amid the evacuation of residents in the area and the expansion of the humanitarian area in Al-Mawasi and Khan Yunis. 

The war in Gaza has driven around 80% of the territory’s population of 2.3 million from their homes and caused vast destruction throughout several cities. 

The death toll in Gaza has soared to more than 34,500 people — per estimates from Gaza’s Hamas-run Health Ministry, which does not distinguish between civilians and combatants. 

The war began Oct. 7 when Hamas attacked southern Israel, killing around 1,200 people, mostly civilians, and abducting about 250 others. Israel says militants still hold around 100 hostages and the remains of more than 30 others.

Fox News Digital’s Lawrence Richard and Bradford Betz contributed to this report.

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Russia has threatened strikes on British military installations in ‘Ukraine and beyond’ and plans nuclear drills in response to remarks by U.K. Foreign Secretary David Cameron and other Western officials. 

Moscow summoned British ambassador to the Russian Federation Nigel Casey in ‘strong protest’ to Cameron’s recent interview with Reuters ‘about Ukraine’s right to strike Russian territory using British weapons,’ the Russian Foreign Ministry said in a statement released on Monday. 

‘Casey firmly pointed out that D. Cameron’s hostile attack directly contradicts the previously sounded assurances of the British side when transferring long-range cruise missiles to the Kyiv regime, that under no circumstances would they be used on Russian territory,’ the statement continued. ‘Thus, the head of the Foreign Office disavowed this position, de facto recognizing his country as a party to the conflict.’

The ministry said that the Russian side ‘views D. Cameron’s words as evidence of a serious escalation and confirmation of London’s increasing involvement in military operations on the side of Kyiv.’ 

‘N. Casey was warned that the response to Ukrainian strikes using British weapons on Russian territory could be any British military facilities and equipment on the territory of Ukraine and beyond,’ the ministry said. ‘The Ambassador was called upon to think about the inevitable catastrophic consequences of such hostile steps from London and to immediately refute in the most decisive and unequivocal manner the bellicose provocative statements of the head of the Foreign Office.’

The remarks came on the eve of Russian President Vladimir Putin’s inauguration to a fifth term in office and in a week when Moscow on Thursday will celebrate Victory Day, its most important secular holiday, marking its defeat of Nazi Germany in World War II.

Drills simulating the use of battlefield nuclear weapons come in response to ‘provocative statements and threats of certain Western officials regarding the Russian Federation,’ Russia’s Defense Ministry also said in a statement. It was the first time Russia has publicly announced drills involving tactical nuclear weapons, although its strategic nuclear forces regularly hold exercises, according to the Associated Press. 

Tactical nuclear weapons include air bombs, warheads for short-range missiles and artillery munitions and are meant for use on a battlefield. They are less powerful than the strategic weapons — massive warheads that arm intercontinental ballistic missiles and are intended to obliterate entire cities.

U.N. spokesman Stephane Dujarric expressed concern that various parties have been talking about issues regarding nuclear weapons more and more recently.

‘Current nuclear risks are at an alarmingly high level,’ Dujarric said. ‘All actions that could lead to miscalculation, escalation with catastrophic consequences, must be avoided.’

The Russian announcement was a warning to Ukraine’s Western allies about becoming more deeply engaged in the 2-year-old war, where the Kremlin’s forces have gained an upper hand amid Ukraine’s shortage of manpower and weapons. Some of Ukraine’s Western partners have previously expressed concern that the conflict could spill beyond Ukraine into a war between NATO and Russia.

French President Emmanuel Macron repeated last week that he does not exclude sending troops to Ukraine, and Cameron said Kyiv’s forces will be able to use British long-range weapons to strike targets inside Russia. Some other NATO countries providing weapons to Kyiv have balked at that possibility.

‘Ukraine has that right. Just as Russia is striking inside Ukraine, you can quite understand why Ukraine feels the need to make sure it’s defending itself,’ Cameron told Reuters last week.

The Kremlin branded those comments as dangerous, heightening tension between Russia and NATO. The war already has placed significant strain on relations between Moscow and the West.

Kremlin spokesman Dmitry Peskov said Monday that Macron’s recent statement and other remarks by British and U.S. officials had prompted the nuclear drills.

‘It’s a new round of escalation,’ Peskov said, referring to what the Kremlin regarded as provocative statements. ‘It’s unprecedented and requires special attention and special measures.’

Russia’s Foreign Ministry also summoned France’s ambassador.

The Associated Press contributed to this report.

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Hamas has agreed to a cease-fire agreement framework put forward by Egypt and Qatar, the terrorist group announced in a Monday statement.

The White House and State Department could not confirm the agreement as of press time, but a Hamas spokesperson confirmed it to Fox News Digital. Israel has not announced its stance on the framework. If it is approved, however, it would bring an extended pause to the fighting that has raged in Gaza for seven months.

‘The fighter brother Ismail Haniyeh, head of the political bureau of the Hamas movement, had a phone call with the Qatari Prime Minister, Sheikh Mohammed bin Abdul Rahman Al-Thani, and with the Egyptian Minister of Intelligence, Mr. Abbas Kamel, and informed them of the Hamas movement’s approval of their proposal regarding the ceasefire agreement,’ the Hamas statement reads.

News of the agreement comes just as Israel appeared to be preparing for a ground assault on Rafah, the final stronghold of Hamas in Gaza. The city is also playing host to more than 1 million Gazans displaced from the north.

Israel urged Palestinians to flee Rafah ahead of the expected operation. Overnight on Sunday, Israeli Defense Minister Yoav Gallant told U.S. Secretary of Defense Lloyd Austin that Israel was left with no choice but to act in Rafah after Hamas terrorists carried out a deadly rocket attack from Rafah earlier in the day that left four Israeli soldiers dead.

President Biden and Israeli Prime Minister Benjamin Netanyahu spoke on the phone about Rafah on Monday, Fox News has learned. Netanyahu has repeatedly  vowed to carry out a military operation in Rafah. According to Israel’s army, forces are beginning with a ‘limited scope operation.’

Lt. Col. Nadav Shoshani, an army spokesperson, said some 100,000 people were being ordered to move to a nearby Israel-declared humanitarian zone called Muwasi. He said Israel published a map of the evacuation area.

These orders were issued through air-dropped leaflets, text messages and radio broadcasts so that Palestinians could get the information.

‘Anyone found near [militant] organizations endangers themselves and their family members. For your safety, the [army] urges you to evacuate immediately to the expanded humanitarian area,’ one flier reads.

Israel’s army said on the social media platform X that it would act with ‘extreme force’ against Hamas terrorists and urged the population to immediately evacuate for their safety.

Fox News’ Lawrence Richard and Trey Yingst contributed to this report.

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Saying that ‘today I am announcing my intention to seek another term’ in the Senate, longtime independent Sen. Bernie Sanders on Monday formally launched his bid for re-election.

The 82-year-old progressive champion who caucuses with the Democrats is running for a fourth six-year term representing the blue state of Vermont in the Senate.

Sanders, the runner-up for the 2016 and 2020 Democratic presidential nominations, is the chair of the Senate’s top health care committee, a senior member on both the Budget and Veterans committees, and is part of the Democrats’ leadership team in the chamber. 

have been, and will be if re-elected, in a strong position to provide the kind of help Vermonters need in these difficult times,’ Sanders touted in an on-camera announcement posted on social media.

Sanders emphasized that ‘in recent years, working together, we have made important progress in addressing some very serious challenges. But much, much more needs to be done if we are to become the state and the nation our people deserve.’

The senator, who has long worked to push the Democratic Party to the left, pushed for trillions in spending during the first two years of President Biden’s administration, as the nation rebounded from the coronavirus pandemic. But his efforts to pass legislation expanding Medicare and weakening the filibuster were unsuccessful.

But Sanders has also worked to seek compromise with more moderate members of the Democratic conference and at times with the GOP minority.

While a Biden ally, Sanders has been a vocal critic of the White House and Democrats in recent months over their push to provide aid to Israel as it battles Hamas in the war in Gaza.

Sanders acknowledged that ‘Israel had the absolute right to defend itself from this terrorist attack,’ as he pointed to the bloody October attack by Hamas that left of 1,200 Israelis dead.

‘But it did not and does not have the right to go to war against the entire Palestinian people,’ he added, as he pointed to the Israeli war in Gaza that has reportedly left over 34,000 Palestinians dead. ‘U.S. tax dollars should not be going to the extremist Netanyahu government to continue its devastating war against the Palestinian people.’

Sanders, a former Socialist mayor of Burlington, Vermont’s largest city, later served in the House of Representatives before winning election to the Senate in 2006.

He was narrowly edged by Hillary Clinton in a marathon and divisive 2016 Democratic presidential primary battle, and was the last candidate standing against Biden in the race for the 2020 nomination.

Democrats currently control the U.S. Senate with a 51-49 majority, but Republicans are looking at a favorable Senate map this year, with Democrats defending 23 of the 34 seats up for grabs. 

 

Three of those seats are in red states that former President Trump carried in 2020 – Ohio, Montana and West Virginia, where Democratic Sen. Joe Manchin is not running for re-election. And five more are in key general election battleground states.

Democrats are also defending an open seat in blue Maryland, where popular former two-term Republican Gov. Larry Hogan is running for the Senate.

With Sanders running for re-election, Vermont’s seat is not considered in play and he’s expected to easily win another term.

Republican Gerald Malloy, who lost the 2022 election in Vermont, is running again.

Framing his re-election effort, Sanders highlighted what’s at stake.

‘There are very difficult times for our country and in world. And, in many ways, this 2024 election is the most consequential election in our lifetimes. Will the United States continue to even function as a democracy, or will we move to an authoritarian form of government?’ the senator asked. 

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Members of Congress are looking to take action against a United Nations agency serving Palestinian refugees in Gaza, amid reports the international organization assisted the Hamas terror group.

Reps. Brian Mast, R-Fla., and Josh Gottheimer, D-N.J., are introducing legislation that would demand the U.S. State Department does everything it can to return American tax dollars that went to the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA).

‘For way too long, UNRWA has masqueraded as a relief organization, while in reality serving as an incubator for Palestinian terrorists. Intelligence reports indicate that as many as 10% of UNRWA workers have direct links to Hamas and Palestinian Islamic Jihadists,’ Mast said in a statement to Fox News Digital.

He added: ‘It’s ludicrous that our hard-earned American tax dollars were going to fund this crap. The State Department needs to do everything it can to recoup this money.’

The legislation comes after allegations surfaced that at least a dozen UNRWA employees joined or otherwise assisted Hamas terrorists during their overnight attack on Israeli border communities on Oct. 7. The attack left more than 1,200 people dead, and Hamas took more than 200 hostages from a music festival and from their homes back into Gaza.

After reports that some UNRWA members helped Hamas, the Biden administration announced on Jan. 26 that it would stop additional taxpayer dollars from going to the agency.

Just days before the freeze, however, the administration had already transferred $121 million to UNRWA.

Mast and Gottheimer’s bipartisan bill hopes to recoup that sum to the U.S.

The legislation is part of a continued effort from the U.S. — and other countries — to separate itself from the agency.

U.S. intelligence in February said it was likely some employees of UNRWA participated in the attack, but it also said it could not verify Israeli allegations of wider links between the agency and UNRWA, according to The Wall Street Journal.

In March, the Israeli government named 12 UNRWA employees who had ties to and assisted Hamas during the Oct. 7 attack on Israel in a dossier that it shared with several of its allies. Three were suspected of being involved in the kidnapping of the hostages or keeping them in their homes.

The agency fired the 12 employees named in the allegations, but the damage was already done and UNRWA lost hundreds of millions of dollars from donors after the dossier was sent.

The information includes allegations that approximately 1,200 employees shared some connection with Hamas — including around 17% of UNRWA teachers (out of a total 8,300) and around 20% of UNRWA school principals and deputy principals (out of a total 500) are members of Hamas. Ties to the group extend to UNRWA workers in positions related to relief and humanitarian aid, with about 10% of the 151 relief workers, and members of UNRWA’s health services.

The dossier also included excerpts from textbooks used in the agency’s school curriculum that allegedly include glorification of martyrdom and antisemitic tropes. Maps provided to children in their textbooks show a singular land where Israel and the Palestinian territories exist but labeled as a singular Palestine.

After the report surfaced, Congress passed legislation to defund UNRWA until 2025. 

Other governments similarly cut financial ties to UNRWA.

The report and subsequent response comes years after former President Trump took action against UNRWA when he was serving in the White House.

Fox News’ Peter Aitken contributed to this report.

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EB Weekly Market Recap Video

If you haven’t seen our latest weekend recording, it’s now available HERE at YouTube.com.

Sample – EB Weekly Market Report

This is a sample of our Weekly Market Report that is sent to EB members every Monday. We also provide a Daily Market Report (DMR) every Tuesday through Thursday and a quick market update on Friday, but this Weekly Market Report is designed with the long-term in mind. I discuss many concepts in this report from week to week, and many of them have been the signals we’ve used to keep our members on the right side of the market for the past several years, including our suggestion to get out of the market early in 2022, just before the 28% cyclical bear market decline.

We also have a BIG members-only event tomorrow, discussing the current state of the market and what to expect over the next several months. Please consider signing up for our 30-day FREE trial and join us for tomorrow night’s event. You can get more information and register for this free event by CLICKING HERE. Either way, enjoy this Weekly Market Report.

Weekly Market Recap

Major Indices

Small and mid caps showed leadership last week. In fact, the IWM is outperforming all of our other major indices over the past month and is second only to mid caps over the past 3 months. If we’re starting another upside move now, it’ll be very interesting to see if small caps continue to lead or if money rotates back towards those large cap growth names.

Sectors

Communication services (XLC) wasn’t the top performer last week, but technically, the XLC does appear to have broken its recent downtrend:

The price action and PPO both look bullish and we saw the RSI bounce off of the key 40 support level. The bears are hoping that (1) the XLC fails to break above short-term price resistance near 81, and (2) the RSI fails to break back up above 60. I believe neither will occur, but we have moved into a more cautious historical period, so we need to remain objective.

Top 10 Industries Last Week

Don’t count out financials just yet. The full line insurance ($DJUSIF) group is breaking out of a cup with handle today:

Bottom 10 Industries Last Week

Consumer finance ($DJUSSF) didn’t have a great week last week, but was it the completion of an A-B-C correction pattern? If so, the 20-day EMA needs to be cleared to confirm the potential start of another uptrend.:

The persistent negative divergence indicated a possible loss of momentum, which suggests the increased likelihood of a decline. We’ve seen that decline quite clearly.

Top 10 Stocks – S&P 500/NASDAQ 100

Bottom 10 Stocks – S&P 500/NASDAQ 100

Big Picture

The monthly PPO continues to push higher and away from centerline support. This is indicative and consistent with how the S&P 500 behaves during secular bull markets. Also, note that RSI 40 support tests have been successful since the financial crisis in 2008/2009. This is another sign that the secular bull market remains alive and kicking.

Both our 10-year and 20-year rate of change (ROC) panels show that highs during this secular bull market have not come close to previous secular bull market highs. It’s telling me we still have much further to go.

Sentiment

Let’s revisit the 253-day SMA of the equity only put call ratio ($CPCE). I want to refresh everyone’s memory as to what happens to the S&P 500 when this sentiment indicator tops with readings showing EXTREME fear:

Bet against this chart at your own risk. Personally, I believe that sentiment plays a much bigger role in stock market direction than most folks give it credit for. Every single major S&P 500 advance during this secular bull market has occurred with a significant top in the 253-day SMA of the CPCE. When this moving average is falling, you want to be on the long side…..PERIOD! This doesn’t mean there aren’t pullbacks. There simply aren’t pullbacks that morph into bear markets.

Rotation/Intermarket Analysis

Here’s the latest look at our key intraday ratios as we follow where the money is traveling on an INTRADAY basis (ignoring gaps):

QQQ:SPY

First, a quick reminder. While this chart is named “@SPYQQQ”, it’s actually the QQQ divided by the SPY. When this line is rising, it means the QQQ is outperforming the SPY (“risk on” environment). When it’s falling, it means the SPY is outperforming the QQQ (“risk off” environment). We’ve clearly been in a downtrend as money has rotated towards defensive- and value-oriented stocks. The past few days, this has changed and you can see the lines turning higher. The key to a sustainable upside move will be the continuation of this ratio to the upside.

IWM:QQQ

On an intraday basis, small caps (IWM) have performed well over the past several months. But gaps have not worked in their favor, which is why small caps have trailed the QQQ and SPY year-to-date and over the past 6 months. In my opinion, the gaps are disguising the underlying strengthening of the IWM. Time will tell if I’m correct or not.

XLY:XLP

The XLY hasn’t performed great vs. the XLP, but opening gaps are masking the true picture, which I believe is that discretionary stocks are stable relative to staples stocks – at least in 2024 thus far.

Key Sector/Industry Charts

Perhaps the biggest industry group chart to show you right now is semiconductors ($DJUSSC). We know this group can light a fire under a secular bull market rally and we’re seeing a breakout of the recent downtrend/consolidation:

Nothing guarantees us higher prices ahead, but if I had my pick of one industry group to break out, it’d be this one. The PPO is now testing its centerline from underneath, which can be a challenge. But we’ve already seen a move above key trendline resistance and both moving averages. Technical improvement is clear.

Trade Setup

Since beginning this Weekly Market Report in early September, I’ve discussed the long-term trade candidates below that I really like. Generally, these stocks have excellent long-term track records and many pay nice dividends that mostly grow every year. Only in very specific cases (exceptions) would I consider a long-term entry into a stock that has a poor or limited long-term track record:

JPMBAFFIVMAGSFDXAAPLCHRWJBHTSTXHSYDISMSCISBUXKREED AJG

Keep in mind that our Weekly Market Reports favor those more interested in the long-term market picture. Therefore, the list of stocks above are stocks that we believe are safer (but nothing is ever 100% safe) to own with the long-term in mind. Nearly everything else we do at EarningsBeats.com favors short-term momentum trading, so I wanted to provide an explanation of what we’re doing with this list.

I don’t have any additions to list “long-term” list at this time.

Looking Ahead

Upcoming Earnings:

Q1 earnings are underway and accelerating. I’ve identified what I believe are key companies that will report this week, with their respective market caps in parenthesis. This is NOT a list of ALL companies reporting this week, so please be sure to check for earnings of any companies that you own or add. Any companies in BOLD represent stocks in one of our Portfolios:

Monday: VRTX ($103 billion), PLTR ($50 billion), MCHP ($48 billion)Tuesday: DIS ($207 billion), ANET ($82 billion), TDG ($71 billion)Wednesday: UBER ($143 billion), ABNB ($102 billion), SHOP ($93 billion)Thursday: RBLX ($24 billion), AKAM ($15 billion)Friday: ENB ($77 billion)

Key Economic Reports:

Monday: NoneTuesday: NoneWednesday: NoneThursday: Initial jobless claimsFriday: May consumer sentiment

Historical Data

I’m a true stock market historian. I am absolutely PASSIONATE about studying stock market history to provide us more clues about likely stock market direction and potential sectors/industries/stocks to trade. While I don’t use history as a primary indicator, I’m always very aware of it as a secondary indicator. I love it when history lines up with my technical signals, providing me much more confidence to make particular trades.

Below you’ll find the next two weeks of historical data and tendencies across the 3 key indices that I follow most closely:

S&P 500 (since 1950)

May 6: -35.12%May 7: -37.30%May 8: +58.06%May 9: -41.62%May 10: -13.57%May 11: -50.36%May 12: +18.78%May 13: -7.49%May 14: -20.15%May 15: +9.23%May 16: +11.47%May 17: -18.79%May 18: -13.84%May 19: -25.73%

NASDAQ (since 1971)

May 6: -57.65%May 7: -58.48%May 8: +76.53%May 9: -53.65%May 10: -17.03%May 11: -19.11%May 12: +33.12%May 13: -16.95%May 14: +13.42%May 15: +35.21%May 16: +52.22%May 17: -36.99%May 18: -9.09%May 19: -42.21%

Russell 2000 (since 1987)

May 6: -85.09%May 7: -95.97%May 8: +77.52%May 9: -36.57%May 10: +1.29%May 11: -50.24%May 12: +0.46%May 13: -84.43%May 14: +10.37%May 15: +29.02%May 16: +20.18%May 17: -23.07%May 18: +82.33%May 19: -41.25%

The S&P 500 data dates back to 1950, while the NASDAQ and Russell 2000 information date back to 1971 and 1987, respectively.

Here’s a quick historical analysis of the S&P 500 during May since 1950:

May 1-5: +29.94%May 6-25: -12.10%May 26-31: +37.27%

Final Thoughts

The bulls took advantage of a bullish historical week (May 1-5) and we saw a nice rally to close out the week. We’re now much better positioned to handle any short-term selling and, quite honestly, aren’t far from breaking out on a couple of major indices/sectors/industry groups. I love the VIX falling back down below 14 after bouncing over 16 on Wednesday and Thursday. Of course, the VIX topped above 19.50 in April, remaining just below what I consider to be a key level of 20.

Here are several things to consider in the week ahead:

Economic Reports. There are only two meaningful economic reports out all week – initial jobless claims and consumer sentiment and both of those will be out in the second half of the week.Earnings. There are fewer and fewer market-moving earnings reports out this week. ABNB and UBER are large caps and will give us a look into the health of the consumer, but otherwise we’ll be getting a number of small cap and mid cap companies quarterly reports.Interest Rates: The 10-year treasury yield ($TNX) seemingly topped last week. It had a chance to break above a key area of yield resistance from 4.65%-4.70%. It did make one close slightly above 4.70%, but that now appears to have been a false breakout. The question this week, after losing 20-day EMA support last week, is can the TNX hang onto key yield support from 4.39% down to 4.30%. If the TNX continues falling, it would be excellent news for the small cap IWM.Semiconductors ($DJUSSC): In my opinion, this is the most important industry group during a secular bull market and it appears the group is breaking above a 2-month downtrend line. Let’s see if we confirm this breakout, or if it turns out to be a head fake.Commodities. Can energy (XLE) hold 50-day SMA support? Can gold ($GOLD) jump back above its 20-day EMA? Can materials (XLB) get past last Wednesday’s high and close there?Growth vs. Value. Growth stocks have been downtrending vs. value stocks for much of the past 2-3 months, but May through August is historically the best 4-month period of the entire year for growth stocks relative to value.History. We literally have just started today a challenging historical period for stocks, from May 6th through May 25th.

Feedback

If you’d like to share your thoughts on our Weekly Market Report, positive or negative, you can reach us at “support@earningsbeats.com”.

Happy trading!

Tom

In this edition of StockCharts TV‘s The Final Bar, Dave recaps another strong day for stocks as the S&P 500 regains its 50-day moving average. He then identifies key levels to watch for PLTR, LCID, NFLX, NVDA, and AAPL, and breaks down the latest market breadth indicator readings.

This video originally premiered on May 6, 2024. Watch on our dedicated Final Bar page on StockCharts TV!

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

Good morning and welcome to this week’s Flight Path. The equity “NoGo” trend struggled this week as prices climbed from lows. We see an amber “Go Fish” bar as the market tries to understand the trend. GoNoGo Trend paints pink “NoGo” bars for treasury bond prices and commodity prices enter a period of uncertainty with consecutive amber “Go Fish” bars. The dollar, currently, is the only asset that is in a “Go” trend as we see the indicator painting weaker aqua bars. Lots of uncertainty this week!

Markets Uncertain of Equity Trend

The “NoGo” trend gave way to an amber “Go Fish” bar at the end of the trading week. We know, that when the amber bar is painted it is because there are not enough criteria being met behind the scenes for the GoNoGo Trend indicator to identify a trend in either direction, Go or NoGo. Adding to the feeling of uncertainty is the candle itself. A doji candle is when the open and close price are the same or very close, and this is what we saw on Friday. There was no clear winner between the bulls and the bears. No surprise then, when we look at the oscillator panel we see the GoNoGo Oscillator riding the zero line and a Max GoNoGo Squeeze in effect. This is a visual representation of the tug of war between buyers and sellers at this level. We will watch closely to see in which direction the Squeeze is broken, as this will help us determine price direction.

The larger weekly chart shows that we are at an inflection point here as well. We have seen a 4th consecutive weak aqua “Go” bar as price seems to have set a new higher low. GoNoGo Oscillator has crashed over the last month to test the zero line from above where we will watch to see if it finds support. If it does, we will see signs of trend continuation on the price chart. A break below the zero line would signal a more drawn out correction.

Rates Fall After Consolidation

This entire week saw GoNoGo Trend paint weaker aqua “Go” bars as price fell from its most recent high. We turn our eye to the oscillator panel and see that GoNoGo Oscillator has failed to find support at that level. As it dips its nose into negative territory we can say that momentum is out of step with the “Go” trend and we will watch to see if it sinks further into negative territory. If it does, then we may see trend change above. A rally back to the zero line would likely allow the “Go” trend to continue in the short term.