Catastrophic Stop News Today

In Day Hagen's Tech Talk focused on intimidation: Higher interest rates are weighing on equities, and focus will be on the Fed’s conference.

The S&P 500 gained 3% in July up for the fifth month in a row. Breadth remained solid all 11 S&P 500 sectors posted positive returns in July.

According to Day Hagen, the Wall Street narrative has been about both bullish and bearish non-price-related macroeconomic themes.

Within the context of the S&P 500’s continuing uptrend and because of the bulls run on Wall Street last week, areas of potential selling pressure loom overhead.

Within the context of the SPX’s uptrend, large cap growth/technology/SPX’s short-term momentum has indeed started to churn.

Based on the May 26, 2022 model updates, the Day Hagan/Ned Davis Research Smart Sector® with Catastrophic Stop strategy has taken a defensive position.

During November, NDR’s global risk-off composite outpaced its risk-on counterpart by more than 500 basis points (bps), it’s largest one-month spread since March 2020.

Following Wall Street’s version of a Black Friday sale, we will let price and our models/indicators tell us when/where this decline ends.

Buyer fatigue battles positive year-end seasonality and the fear of missing out. Which will prevail?

With the start of a new month, I think the equity market is trying to find a balance between “new month demand” (investment and trading dollars put to work at the start of a new month) and some potential near-term buyer fatigue.