SECOND STRAIGHT BOUNCE ON TIGHT ACTION, LEADERS FINE; FOMC ON DECK

TLDR;

Don Vandenborg from River Asset Management provides a market insight, noting a mild correction with indexes holding above the 200-day moving average. Leaders are outperforming, and starter positions have been taken in fundamentally strong names. The market is awaiting the FOMC decision and Fed head Jerome Powell's statement. The 21 over 21 list is up 73%, and the Turbo 12 is up 1.17%. The VIX is showing improvement, and sector strength is seen in oils, solar, cloud software, and semiconductors. Portfolio changes include adding to NET and a starter position in NBIS.

• Market in mild correction, holding above 200-day moving average.
• Leaders outperforming, starter positions in strong names.
• Awaiting FOMC decision and Fed statement.
• VIX improving, sector strength in oils, solar, and semiconductors.
• Portfolio adjustments in growction and turboction.

Market Overview and Trend Gauge [0:22]

The market is currently in a mild correction phase. The indexes are above the 200-day moving average, which is a critical level to hold to avoid serious trouble. However, the indexes are below the 50-day and 21-day moving averages, indicating short-term and medium-term weakness. Despite the overall market condition, leaders are showing relative strength, and the firm has initiated starter positions in companies with strong fundamentals and positive relative strength. The firm is cautious due to overall market and geopolitical instability.

Market Performance and Key Indicators [1:44]

The market has shown two consecutive days of positive movement after bouncing near the 200-day moving average. Upcoming events include the PPI release and the FOMC meeting. No interest rate changes are expected, but the market's reaction to Jerome Powell's statement is crucial. Leaders continue to outperform, as seen in the 21 over 21 list (up 73%) and the Turbo 12 list (up 1.17%). The MAG 7 stocks are showing mild relative strength, up 0.41%, and the RG8 growth ETF composite is up about 1%. The S&P 500 is up a quarter of a percent, while the NASDAQ 100 shows minor relative strength, up a half percent.

S&P 500 and Equal Weight Analysis [4:32]

The S&P 500 bounced off the 200-day moving average but failed to sustain gains above the declining 8-day moving average. It is trapped between the 30-week (150-day) and 40-week (200-day) moving averages. Breaking below the 200-day moving average could lead to serious market corrections. The equal weight S&P 500 is further above the 200-day moving average but also below the 21-day moving average, which has crossed below the 50-day moving average. It also failed to clear the declining 8-day moving average.

NASDAQ 100 and Dow Jones Analysis [5:50]

The NASDAQ 100 closed slightly above the 8-day moving average but was rejected into the declining 21-day moving average. It remains above the 200-day moving average. The relative strength line of the NASDAQ has been outperforming for the last couple of weeks. The Dow Jones Industrial Average is holding the 200-day moving average but ran into the declining 8-day moving average and failed.

Midcaps, Russell 2000 and VIX Analysis [7:23]

The S&P 400 (midcaps) was up nicely but ran into the declining 8-day moving average, remaining well above the 200-day moving average. The Russell 2000 also ran into the declining 8-day moving average but is above the 200-day moving average. The VIX broke below the 21-day moving average for the third consecutive day, with a handle of 22. Ideally, it should get below 20, and best case, below 19, to imply a 1% ATR range on the S&P 500, which tends to outperform in such conditions.

Dollar, Bonds, Gold and Bitcoin Analysis [8:21]

The dollar index is showing a breakout from a range, pulling back to the top of the range. Bonds are exhibiting a similar setup. The 10-year yield broke out late last week and is now pulling back. Gold is holding the 50-day moving average but has broken below the 21-day moving average. Silver looks worse, with both the 21-day and 50-day moving averages declining. Gold and silver stocks are also breaking the 50-day moving average. Bitcoin has been showing relative strength, clearing the 21-day moving average and approaching the declining 50-day moving average.

Tail of the Tape and Key News [9:31]

There's significant improvement in the stochastics for both the indexes and the RG8, moving out of oversold territory. The percentage of stocks against the 5-day moving average popped up but pulled back to 67% and 69% for the S&P and NASDAQ 100, respectively. Key news includes the FOMC meeting and PPI data, as well as Micron earnings. Most indexes ran into and closed below the declining 8-day moving average, except for the NASDAQ 100. The VIX is still above 20.

Portfolio Changes and Sector Strength [11:28]

NBIS experienced a secondary offering after positive news, leading to a pullback. The firm took advantage of this pullback to establish a starter position in growction, sized against the 8-day moving average. They also added to NET as it bounced off the 8-day moving average. Sector strength was seen in oils, solar, cloud software, and semiconductors, while gold, silver, staples, utilities, and healthcare declined.

Growction Portfolio Review [13:11]

The growction portfolio includes positions in Fastly, Circle, Cloudflare, VRT, and NBIS, all of which are in the 21 over 21 list. Fastly and Circle are riding the 8-day exponential moving average higher. Cloudflare is a clear relative strength winner, bouncing off the 8-day moving average. NBIS experienced a gap down due to an offering, and the position is sized against the 8-day exponential moving average.

Turboction Portfolio Review [15:30]

The turboction portfolio stopped on Intel due to it reversing and breaking stacked moving averages. New positions include BE (Bloom Energy), showing tight action against the 8 and 21-day moving averages, and SI, which had a nice gap up with relative strength confirming the move. Turbo also owns TER, which is pulling back in a light volume manner and bounced at the 50-day moving average.

Closing Remarks and Contact Information [16:54]

The flagship portfolio, growction, and its more aggressive counterpart, turboction, are designed to grow assets during uptrends and protect them during downtrends. The firm has been in protect mode due to market conditions. The 200-day moving average remains a key level. Contact information is provided for those interested in learning more. The key is not how much you make in the market, but how much you keep.