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  1. ETF Strategist Channel
  2. Day Hagan Tech Talk: Short & to the Point
ETF Strategist Channel
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Day Hagan Tech Talk: Short & to the Point

Day Hagan Management   Sep 27, 2023
2023-09-27

By Art Huprich, CMT

Summary

Given the S&P 500’s (SPX/4337.44) bearish reversal in late July, early August downside follow-through, and poor seasonal factors, the challenges faced by equity markets have consistently built up. This includes deteriorating price-related guideposts (breadth, new lows, selling volume over buying volume, trend, risk-off sectors outperforming, etc.), plus a more hawkish Fed: “higher for longer,” fewer rate cuts in 2024 than initially expected and continuing liquidity drain.

Avoiding the Lion’s Roar

My wife calls her brother’s propensity to draw out the telling of a story an MGM Lion Roar—please Google it. I don’t want to drag out a lion’s roar here, so let’s get right to it: As the market exits its seasonally weak period (Figure 1) and with sentiment starting to reflect extreme pessimism (it now needs to reverse up to give a buy signal), it will be critical that longer-term guideposts not deteriorate further and, starting now/soon, short-term guideposts rebound/reverse direction. (Long-term guideposts include the NDR Catastrophic Stop Loss model, trend, breadth, etc. Short-term guideposts are “price,” interest rates, energy, U.S. Dollar, and short-term oversold condition.) Otherwise, I won’t be surprised if SPX eventually visits 4200+/- —Figure 2.

Figure 1: S&P 500 Cycle Composite for 2023. | Allowing that “trend is more important than level,” this guidepost has been very accurate in 2023, as it was in 2022.

Day Hagan Tech Talk: Short & to the Point

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Figure 2: S&P 500 with rising 200-day MA. | Please refer to the commentary above and inside the chart. Areas of resistance (selling pressure) and support (buying interest) reflected by red and green/blue dashed lines respectively.

Day Hagan Tech Talk: Short & to the Point

Follow-Up: As a follow-up to last week’s topic (Really? Can’t Make This Stuff Up), I read the following recently (emphasis mine):

Even though the economy continues to face a myriad of near-term risks, including a potential downside from the UAW strike, the resumption of student loan payments, a possible government shutdown, and rising energy prices, the Fed… revised up its projection for real GDP growth in 2023 and 2024.

I’ll note that among the myriad of risks (short- and long-term) is rising interest rates/secular-long-term uptrend in interest rates, i.e., a “higher-for-longer” interest rate policy. In terms of revised up projections, I’m not sure what world the Fed is living in. Surely not mine.

Note: Please let me know if you’d like to schedule a call to go over the process and discipline underpinning our Smart Sector with Catastrophic Stop, Smart Sector Fixed Income, and/or Smart Sector International strategies. Considering the tape action of both equity and fixed income markets in 2022 and 2023, I believe it may be a good investment of time.

Day Hagan Asset Management appreciates being part of your business, either through our research efforts or investment strategies. Please let us know how we can further support you.

Art Huprich, CMT®
Chief Market Technician
Day Hagan Asset Management

—Written 09.25.2023. Chart source: Stockcharts.com unless otherwise noted.

For more news, information, and analysis, visit the ETF Strategist Channel.

Upcoming Events

Enhance Your Portfolio Process with the Day Hagan/Ned Davis Research Smart Sector® Series and NDR Catastrophic Stop, hosted by Art Day, on October 11, 2023, at 1:15 p.m. EDT

Enhance Your Portfolio Process with the Day Hagan/Ned Davis Research Smart Sector® Series and NDR Catastrophic Stop, hosted by Art Day, on October 11, 2023, at 4:15 p.m. EDT

Day Hagan Technical Analysis, hosted by Art Huprich, CMT, on November 14, 2023, at 4:15 p.m. EDT

Disclosure

The data and analysis contained herein are provided “as is” and without warranty of any kind, either express or implied. Day Hagan Asset Management (DHAM), any of its affiliates or employees, or any third-party data provider, shall not have any liability for any loss sustained by anyone who has relied on the information contained in any Day Hagan Asset Management literature or marketing materials. All opinions expressed herein are subject to change without notice, and you should always obtain current information and perform due diligence before investing. DHAM accounts that DHAM, or its affiliated companies manage, or their respective shareholders, directors, officers and/or employees, may have long or short positions in the securities discussed herein and may purchase or sell such securities without notice. The securities mentioned in this document may not be eligible for sale in some states or countries, nor be suitable for all types of investors; their value and income they produce may fluctuate and/or be adversely affected by exchange rates, interest rates or other factors.

Investment advisory services offered through Donald L. Hagan, LLC, a SEC registered investment advisory firm. Accounts held at Raymond James and Associates, Inc. (member NYSE, SIPC) and Charles Schwab & Co., Inc. (member FINRA, SIPC). Day Hagan Asset Management is a dba of Donald L. Hagan, LLC.

For more information, please contact us at:

Art Huprich, CMT

[email protected]

For more information, please contact us at:

Day Hagan Asset Management

1000 S. Tamiami Trl

Sarasota, FL 34236

Toll Free: (800) 594-7930

Office Phone: (941) 330-1702

Website: https://dayhagan.com or https://dhfunds.com

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