Geopolitics are back in focus on this first trading day of September. North Korea’s push forward with another test on the nuclear front over the weekend caused U.S. Ambassador Nikki Haley to suggest that Kim Jong Un is “begging for war.” And given that South Korea is saying that the North is prepping to launch an intercontinental ballistic missile, the situation appears to be heating up. In response, the U.S. is looking to hit Un’s regime with even tougher sanctions via the U.N. In addition, it will be a busy week of “Fedspeak” with U.S. Federal Reserve officials Lael Brainard, Neel Kashkari, Robert Kaplan, and Bill Dudley (all voting members of the FOMC) slated to speak and the ECB meeting on Thursday. All of which is occurring as we enter what has historically been the weakest month of the calendar.

But before we get carried away with speculation of what might come next, let’s turn our attention to our objective review the key market models and indicators and see where things stand. To review, the primary goal of this weekly exercise is to remove any subjective notions one might have in an effort to stay in line with what “is” happening in the markets. So, let’s get started.

The State of the Trend

We start each week with a look at the “state of the trend.” These indicators are designed to give us a feel for the overall health of the current short- and intermediate-term trend models.

Executive Summary:

  • Not surprisingly, the short-term Trend Model has improved on the back of the recent rebound. 
  • The short-term Channel Breakout System remains on a buy signal. A break below 2428 would turn this indicator negative. 
  • The intermediate-term Trend Model flip-flopped back to green last week. 
  • The intermediate-term Channel Breakout System remains on a sell signal and will require a move over 2491 to turn green. 
  • The long-term Trend Model remains healthy. 
  • The Cycle Composite remains negative throughout September. 
  • The Trading Mode models are currently all in mean-reversion mode.
    • Print Friendly, PDF & Email

    Related Posts