Fall Run? – September 25, 2021

The indexes didn’t close with a meaningful percentage change, but it was a wild, wide-ranging week after quadruple options expiration. After decisively slicing the uptrend lines on Monday for many of the index charts, the market rallied throughout the week.

The big change this week was the interest rate move. While interest rates rallied, that pushed bond prices down. If an investor doesn’t want or have to be in bonds, where are they going to move the money? Probably the equity markets, which can also add fuel to the next leg of the rally. We’ll have more on the conference call.

Transports improved this week. The railway chart built a hammer candle after declining for six weeks. Airlines soared with a large weekly price bar moving above the weekly closing levels of the last 10 weeks! Hotels popped with a large outside bar and I think it was more than Greg travelling through the Rocky Mountains. The Banff Springs Hotel on the left is a reminder of why people love to travel. The gambling index also gave me one buy signal a few weeks ago, but the chart hasn’t turned up meaningfully. When I group those three industries together, a macro trend forming looks like investors are moving towards travel and entertainment stocks.

The energy crunch worldwide seems to be forming. Cameco as a rep for uranium names has moved 25% each way, all in September! Natural gas availability in Europe and Russia seems to be very, very tight. The situation in the North American inventory continues to tighten as well with Hurricane Ida struggles. The recent weeks have tightened slightly, not large. The bigger issue is that week after week, we continue to tighten. When will production catch up with demand? Energy has been the #1 sector over the last month. Oil and gas are being used for power generation worldwide as renewables come up short on meeting demand.

Consumer Discretionary (Cyclicals) have been the second-best performer. The sector chart for the XLY looks ready to break out to new highs. Tesla is turning up. Ford and GM both started to turn higher. Toyota Motors looks good as well. Check the sector.

Summary: Buy signals in a few industry groups. Bitcoin is on a long 18-month trend line this week. We need to see the September downtrend on the $NDX break to the upside this week. Trade well but be careful of a downside break.

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