Low bond prices have resulted in high interest rates, but this is expected to alleviate inflation concerns. During the week of October 22, 2023, markets declined as long-term interest rates increased further, leading to heightened fears of inflation. The media is instilling fear in inexperienced investors, causing them to sell their bonds despite the attractive 5.1% yield (noting the significant selling volume climax). This contrasts with the panic buying of bonds in 2020 during the COVID pandemic, when the yield was only 1.12%. Ultimately, high interest rates will slow down the economy, and the Green Line indicates that rates should eventually drop to around 4%. Investors are likely to be surprised by this. Currently, stocks need T-Bonds to establish a solid bottom and rebound. Bonds will eventually align with the Green Line again once inflation fears subside, which should then lead to a rise in stock indices during Wave 5, testing the August high. By following the Green Line System, investors can direct their money into the strongest areas and potentially see growth in both bull and bear markets. It is important to focus on following the money rather than being influenced by the media.
In terms of recent gains, positions in Lilly (+9.6%), Amazon, NVIDIA, NASDAQ 100 Fund, S&P 500 Fund, and Tech Fund were closed out for the week. The Grayscale Bitcoin Fund GBTC experienced a breakout, indicating stage 2 bull in the long-term portfolio and a significant increase of 16.8%.
For the week, the Dow declined by 1.58%, the S&P 500 by 2.39%, and the NASDAQ 100 by 2.92%. Many major indices still have a relative strength below 80, hence it is advisable to own stronger funds in these areas. The inflation index (CRB) increased by 0.72% for the week and remains above the Green Line, signalling economic expansion. Bonds, on the other hand, declined by 4.99% for the week and are below the Green Line, also indicating economic expansion. The US dollar decreased by 0.42% for the week and remains above the Green Line. Crude oil increased by 0.44% to $88.08, while gold increased by 2.72% to $1994.40.
Micro-day trades are occurring on the new Discord site (free), and it is recommended to join for mobile notifications during the day. Other notification methods have proven to be slower. Additionally, live streaming on YouTube during market hours provides more action on the day trading scrolling charts as well as charts for indices and large caps.
In terms of investment recommendations, there are currently six logged swing trading positions for the short and medium term, with eight investments on the short-term watch list. It is important to be patient and wait for green zone buy signals. The long-term investments include AI, C3 AI Inc., BUILDERS FIRSTSOURCE, GRAYSCALE BITCOIN FUND, HOME BUILDING FUND, ORACLE CORP., PINTEREST INC., INVERSE S&P 500 FUND, INVERSE VIX FUND (Greed Index), TAL EDUCATION GROUP, and WEIGHT WATCHERS INT’l.
All trading information can be found on the trading dashboard, including swing trading scrolling charts and day trading scrolling charts, as well as watch lists, current positions, closed positions, the top 100 list, and the dividend growth portfolio. The ETF sector rotation system and Dogs of the DOW system are also provided. A long-term strategy for IRAs and 401k plans is available, as well as the CNN Fear & Greed Index. It is noted that market risk is currently low (GREEN), increasing the probability of successful short-term trades. Lastly, older postings can be found under the Commentary section for weekly updates and the Buy/Sell Signals section for daily updates.
