Risk Off - Weekly "Signals" Email - 9/18/23
Broad markets closed weaker with the Nasdaq and S&P 500 down slightly. Our Trade of the Week was a Zone 4 Add/Initiate signal that has performed well despite the broader weakness.
Trade of the Week
On September 11, 2023, we issued a Zone 4 100% Add/Initiate Sentiment Index on Moderna (MRNA) at $105.8. On September 15th, 2 days later, MRNA closed at $114.59 up 8.31% despite the broader markets finishing lower on the week.
This isn't just a one-time win. It shows the real value of acting quickly on a strong signal. While we can't guarantee wins every time, our "Sentiment Index" rating is here to give you an edge. And remember, if you're not getting our daily updates, you might be missing out on opportunities like this one.
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Quote of the Week
"The market is a device for transferring money from the impatient to the patient." — Warren Buffett
Remember investing is a long term game. DynaLogic’s system is designed to help you buy into weakness and sell into strength by sending add/initiate and sell signals, with a zone indicating the strength of the signal. Over time, we’re confident this system can help investors control their emotions and achieve superior results.
Market Pulse
Overview
The major indexes were relatively flat for the week, while inflation remains persistent with the Consumer Price Index increasing at its quickest pace since the middle of 2022, up 3.7% in August vs last year and 0.6% vs last month, though this was largrly driven by higher energy costs. The consumer remains strong overall but higher energy prices represent a threat to spending in other areas of the economy.
Both domestic and global factors weigh in, from shifts in consumption behavior in the U.S. to oil price dynamics and production cuts internationally. As the U.S. Federal Reserve grapples with these changes, the broader equity market continues to find its way, with occasional headwinds.
Market Moves:
U.S. Economic Indicators: Even as headline Consumer Price Index (CPI) rose by 0.6% in August, largely influenced by escalating energy prices, the core CPI, which excludes volatile components like food and energy, actually fell, hopefully indicating that the disinflationary trend of this year can continue.
Consumer Behavior: The U.S. consumer remains resilient but not without signs of weariness. Retail sales, which saw an uptick in August, were primarily driven by gasoline sales. The larger picture reveals that consumers have largely used up the excess savings from the past three years.
Oil Dynamics: U.S. crude oil prices have shown an upward trend, reaching around $90 per barrel, primarily due to production cuts from major oil exporters like Saudi Arabia and Russia. While higher energy prices influence consumer spending, a ceiling is expected given the demand patterns, especially as the summer travel season concludes.
Market Stats:
Major Indexes: For the week, the Dow Jones Industrial Average saw a modest increase of 0.1%, whereas the S&P 500 Index and NASDAQ declined by 0.1% and 0.4% respectively.
Oil Prices: Crude oil settled at $91.10 per barrel, marking a 4.1% rise for the week.
Interest Rates: The yield of the 10-year U.S. Treasury note stands at 4.33%. Meanwhile, the European Central Bank continues its aggressive stance against inflation, marking its tenth consecutive interest rate hike.
Other Developments:
Labor Market: There's a gradual softening in the labor market, with some signs of potential slowdowns in job and wage growth. However, the overall employment scenario remains robust.
Federal Reserve Outlook: The Federal Reserve seems poised to maintain its rates in the upcoming meeting, taking a cautious approach amid the ongoing inflationary pressures. Rate cuts might be on the horizon next year, but uncertainty prevails regarding their timing and extent.
Global Influences: The European Central Bank, responding to inflation concerns, raised interest rates, taking them to their highest since 1999. Additionally, U.S. government bond prices are under pressure from the potential of further rate hikes.
The Week Ahead:
Key reports for this week include the housing market index (Monday), a two day policy meeting by the Federal Reserve concluding Wednesday, and Existing Home sales and weekly unemployment claims on Thursday.
Future Outlook:
A deceleration in growth seems imminent, but the possibility of a soft landing has increased, potentially bypassing a traditional recession. While the market has seen consistent growth, there's a cautious sentiment suggesting investors prepare for potential volatility. The latter half of 2023 might witness a pullback, especially considering historical market patterns for September and October. Yet, the absence of major economic or financial imbalances and peaking rates offer a reassuring backdrop for the market's future.
Weekly Signal Summary (Sells)
Our Sell technology is designed to sell into strength, to take some risk off the table, usually resulting in the underlying security continuing to move higher after the sell. This week we posted 10 sell signals which had a price move of greater than +-1.5%, and of these, 9 or 90%% decreased in price after the sell signal.
Weekly Signal Summary (Add/Initiate) “Buy”
For the week we had 1 securities that had a price movement greater than +-1.5% on the week, with 5 or 38% moving higher after the Add/Initiate (Buy) signal, with Moderna leading the way, despite the overall weakness in the broad markets for the week.
The DynaLogic strategy is always buying into weakness so it is highly possible the underlying security will continue to decline; however, we believe “Buying on Weakness” is the right strategy to follow in the long run, even if it doesn’t pan out in every instance (no strategy does).
The DynaLogic signals help you know WHEN TO SELL and WHEN TO ADD to the stocks you own or are considering for purchase. Unlike other services, we don’t attempt to recommend stocks or predict what future prices will be. Our Add/Initiate and Sell signals are based solely on historical price movement and pre-established price targets.
In Case You Missed It
Unlock Better Decisions: The Conservatism Bias & You
This past Thursday, we released the second episode of our podcast. Our current series spotlights the mental roadblocks that often hinder our decision-making process. In Thursday’s episode we covered the 'Conservatism Bias.' If you've ever found yourself clinging to outdated beliefs, even when presented with fresh evidence, this episode is a must-listen!
🎙 Episode Highlights:
Financial Folly: Delve into why analysts sometimes ignore the changing tides of the market, sticking to outdated predictions.
Bias Triggers: Uncover the 7 surprising reasons investors fall prey to the Conservatism Bias, from emotional ties to cognitive comfort zones.
Bias Busters: Equip yourself with 10 concrete strategies to dodge this bias and elevate your decision-making game.
Set yourself on a path to smarter, more informed decisions. 🚀🧠 Listen to the full episode.
Understanding when to buy or sell in the market can be tricky, and our emotions can lead even experienced investors to make poor decisions. With DynaLogic, you get a more straightforward approach. Instead of trying to guess the best time to act, our system tells you clearly. We have a planned way to help you take some profits, letting you spread out and protect your investments, while also alerting you to opportune moments to add to or start a position.
Why use DynaLogic? Our system helps you use the market's ups and downs to your benefit. When a stock goes up and we suggest selling some of it, it's because that's how our system is set up. We help you sell in parts, so you can keep investing over time and take out profits in a planned way. This means less guesswork and fewer regrets. When a stock goes down, we alert you to opportune moments to add to your position, or open a position in a stock you’ve been following.
Here's the promise: Follow the system, detach from the market noise, and witness long-term profitability. We've got the case studies to prove it.
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"DynaLogic doesn’t predict the future; it prepares you for it!"
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Testimonials
The signals come through and overpower my idea of what I *think* I should do regarding my investments.
It is cold, factual and driven by data - quite the opposite of my Extroverted Feeler diagnosis by the Insights Discovery test. Actual quote: "He may jump to conclusions without gathering all the necessary information or taking the time to really understand the situation."
With work and family, taking the time to gather the necessary information about my investments is extremely difficult so I need to find my opposite personality type, "the observer" and have done so with Dynalogic. - Jamie G.
I've been following DynaLogic for a while now. It’s an invaluable tool to use as part of my investing strategy. I find it’s difficult for me to sell stocks when they are rising, only to kick myself when I didn't take gains if it drops down the road. So many publications focus on telling you what stocks to buy but I haven't found anything like this that alerts you when to sell which is really helpful when you can't monitor all your stocks all the time. I've also had some really nice gains off the buy signals too. - Kevin F.
The predetermined buy and sell signals built into the strategy make life easier and a more efficient use of time as the signals take the emotion out of the equation. Terry S.
I've been using DynaLogic for 6 months now. I've already seen a big impact and it's provided me a roadmap for sound decision making. The best part... I am not one that is trying to make the decisions. I've spent far too many years guessing what to do with my investments based on what feels right. This lays it all out in a simple way and tells me when and how to make decisions. Wesley L.
After reading, then sleeping on it, then rereading, the mathematics make good sense. Thanks for saving me from my emotions 🙂 – Dale R
I've been following for a while and just observing, I've missed out on major increases, while losing 20% trading on my emotions, I could've tripled that amount in gains if I followed your signals!
It's a no Brainer to sign up...I'm excited to see where this leads.
Now I can focus on increasing my income while following your trade signals. Tim O.
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