"The Investor's Compass" - Powered by DynaLogic for 4/29/24
Using rules-based strategies to buy low, sell high, and overcome emotions
The broad markets were all up on the day with the Dow up .36%, S&P up .95%, and the Nasdaq up 1.54%. Biggest sector gainers were Communication Services up 2.76% and Technology up 1.13%. Some of the biggest winners and losers were:
Yesterday, as part of the GDP report, we learned that consumer prices for March accelerated, rising at an annual rate of 3.4%, up form the 1.8% rate in the fourth quarter.
Today, at 8:30 AM EDT, the Fed’s much watched inflation number, core Personal Consumption Expenditures (PCE) was released, and it was hotter than expected, up 2.8% in March from a year ago. Personal spending rose .8% on the month, more than personal income increase of .5%. The personal savings rate also fell to 3.2%, down from 3.6% in February and down 2 full percentage points from a year ago.
The last mile for the Fed on reducing inflation down to their 2% target is proving a challenge. What was to be 5 or 6 cuts in the Fed Funds rate back in January is now looking like maybe one or no cuts in 2024 and the possibility of a rate hike if inflation continues to accelerate.
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Zone Technology & Relative Strength Index (RSI)
The DynaLogic platform tracks the price of a security and issues an Add/Initiate (BUY) or Sell signal based on a predetermined change in price. The price of a security is placed in Zones 1-4. A Zone-1 indicates there has been a significant price decline in a security and there is potentially substantial upside opportunity. Zone 4 indicates there has been significant price appreciation in a security and there is potentially substantial downside risk.
RSI- The Relative Strength Index is a momentum oscillator that measures the speed and change of price movements on a scale of 0-100. RSI readings above 70 indicate a security is in an overbought position and readings below 30 indicate a security is in an oversold position.
It is important to understand that readings are "probability" indications and not absolute turning points, and risk management needs to be a part of the investment process. A Zone 4 "substantial downside risk" coupled with a RSI over 70 doesn't mean the security won't continue to trend higher. A Zone 1 "substantial upside opportunity" coupled with an RSI of 28 doesn't mean the security won't continue to trend lower.
Today’s Signals
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