Risk Off - Weekly "Signals" Email - 9/25/23
Broad markets closed closed significantly lower for the week with the Dow off -1.9%, the S&P off -2.92% and the tech heavy Nasdaq off -3.48%. Treasury yields spiked higher and gold was higher.
Trade of the Week
On September 21, 2023, we issued a Zone 4 100% Add/Initiate Sentiment Index on Broadcom, Inc. (AVGO) at $808.38. On September 22nd, 1 days later, AVGO closed at $829.08 up 2.6% despite the broader markets finishing substantially 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
“You get recessions, you have stock market declines. If you don't understand that's going to happen, then you're not ready, you won't do well in the markets." — Peter Lynch
Peter Lynch's words remind us that the market is anything but predictable. With DynaLogic, you don't have to worry about being caught unprepared. Our system is designed to remove emotional decision-making, allowing you to strategically manage your investments for all market conditions. By issuing clear signals for when to trim back on a well-performing asset, DynaLogic helps you prepare for those inevitable downturns. Instead of panicking or making rash decisions, you'll have a strategy that sets you up for long-term success—even when the market isn't cooperating.
Market Pulse
Overview
Key Takeaways:
U.S. markets continue to experience a slump; the S&P 500 and NASDAQ have declined for three weeks.
Federal Reserve signals potential for rates to stay higher for longer.
U.S. Treasury bond yields spike to a decade high, although they did retreat a little.
Market volatility shows a noticeable uptick, a shift from its recent lull.
Japan and the UK maintain their current interest rates, citing deflationary risks and a decrease in inflation, respectively.
The Japanese yen continues to weaken against the U.S. dollar.
An upcoming U.S. report will indicate if the recent inflation trend persists.
U.S. Markets Struggle
The S&P 500 and NASDAQ have posted losses for three consecutive weeks, declining by around 3-4% due to concerns following the Federal Reserve's recent meeting.
Federal Reserve's Latest Signals
The Federal Reserve has maintained its interest rates but hints at keeping rates high until 2024—longer than previously indicated.
Treasury Yields Surge
U.S. Treasury bond yields spiked last Thursday but recovered slightly on Friday. The yields hit their highest levels in more than a decade, indicating growing concern among investors.
Volatility Is Back
Market volatility increased by nearly 25% this week, as reflected in the Cboe Volatility Index.
International Monetary Policies
Japan's central bank maintains its low-interest-rate policy, citing deflationary concerns. The Bank of England paused its streak of interest rate hikes as inflation eased in August.
Currency Watch: Yen Weakens
Japan's yen has depreciated significantly against the U.S. dollar due to the widening gap between Japanese and U.S. interest rates.
Upcoming Inflation Report
The U.S. Federal Reserve's upcoming report may provide further insights into inflation trends.
The Week Ahead
Keep an eye on several important economic reports, including new home sales, consumer confidence, and GDP estimates, among others.
Deeper Analysis:
Last week, the Federal Reserve made it clear: interest rates will remain elevated for some time to combat inflation. This stance has put pressure on both the stock and bond markets. Despite signs of cooling in the labor market and inflation gradually lowering, the Federal Reserve maintains the option of an additional rate hike. In this fluctuating environment, we advise long-term investors to consider market volatility as an opportunity to diversify portfolios. Luckily DynaLogic’s system is the perfect tool to help you do this in a systematic and calculated way.
The Fed's recent updates suggest they may stick to their interest rate plans unless significant economic shifts occur. Their projections also indicate more optimism about economic growth and employment than before.
With this "higher for longer" approach, investors may find opportunities in specific market segments. Equities may see a shift in leadership, and the bond market could offer better yields, especially if the Fed is nearing peak interest rates.
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 3 sell signals which had a price move of greater than +-1.5%, and of these, 2 or 67%% decreased in price after the sell signal.
Weekly Signal Summary (Add/Initiate) “Buy”
For the week we had 54 securities that had a price movement greater than +-1.5% on the week, with only 2 moving higher after the Add/Initiate (Buy) signal.
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.
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.
Don't sit on the sidelines. Take advantage of our 7 day free trial today!
Think differently with DynaLogic. It's not about timing the market; it's about prepping for its every move. Ready to try? Claim your free trial now.
"DynaLogic doesn’t predict the future; it prepares you for it!"
Still on the fence? Find out what our premium subscribers think:
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.
If you are a new subscriber, for help understanding how DynaLogic works and how to properly use our system, head to this post which contains articles on how to get started with DynaLogic and common questions.
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