From Recession to "Soft Landing" to "Safe Take-Off"? A Thrilling Market Transformation!

July 9th 2023 UPDATE

Here is my weekly take on the markets.

Technicals

We are still in an uptrend as shown by the equal weight SP500 below. Yet… we are in a slippery environment. More on this below.

Technology taking a breath and it makes sense after such a strong move in 2023. Note the 4 weeks consolidation just above the 10-week moving average:

Looking at industry sectors, Industrials are on an uptrend, and Real Estate showing signs of waking up.

Looking around the world is difficult to find clear “buys” as most indexes are showing signs of uncertainty or indecisiveness.

Looking at my basket of ETFs, Electric vehicles keep showing strength:

The MACRO

Macro data keep being mixed and confusing, with inflation data that is starting to tick higher when looking at the forecast for July data coming out in August. I twitted about this:

The FED might raise rates again because of it. The 10-year US treasury bond is ticking higher and it is another bad sign.

Yet, for the first time in many months, the amount of money in the system started to grow again!:

If the trend continues, the chances of avoiding a recession at all increase.

Banks are tightening their credit standards but.. at a lower pace, signaling a possible change in the credit environment.

In a nutshell:

• It is highly likely that the US will avoid a recession.

• If the economy continues to exhibit signs of strength, there may be one or a few more rate hikes.

• As long as inflation remains under control, we should witness a steadily improving economy.

• Therefore, the focus for the Federal Reserve might shift from achieving a soft landing to engineering a "safe take-off" for the economy in 2024.

• If so, it implies fostering an economy that enters a new growth stage while maintaining an acceptable level of inflation of around 3% and interest rates below 4%.

My PORTFOLIOS (POTS)

Regarding my 10X LARGE CAP momentum pot, I am raising my Stop Losses as follows:

• $LI to 29.7

• $TWLO to 58.7

Here is a picture of my portfolio (link):

The picture of my 10X SMALL CAP momentum pot is much brighter, with an average gain of 65% for my active 6 positions:

The portfolio is doing very well (+21% since inception earlier this year) and beating the SP500 by 11%.

This week I am not adding anything new. I am raising my stop losses as follows:

• $INTT to $21.97

• $OPRA to $16.9

• $GENI to $4.95

• $NVTS to 8.39

• $CREX to 2.59
  

That’s all! Have a great week ahead!

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Important: this is not investment advice. Consult a licensed financial advisor before making any investment decision.