Research Summary
This report discusses the current state of the US dollar, the SPX, US Treasuries, and various market sectors. It highlights the bullish trend of the US dollar, the dominance of the bulls in the SPX, and the potential for bonds to be a good long-term investment. The report also covers the performance of different sectors and countries, with a focus on Turkey’s ETF and the tech sector.
Key Takeaways
US Dollar’s Bullish Trend
- Strong Bull Thrust: The US dollar has shown a strong bull thrust from a 6+ year sideways congestion zone, indicating a potential for new highs.
- Fed Pause not a Pivot: Despite a pause from the Federal Reserve, the report suggests that this does not mean a pivot, countering a popular narrative.
- Market Repositioning: The market is currently long on euros and pounds, which could drive the DXY higher once it starts repositioning.
SPX and US Treasuries
- Bulls in Control: Despite a dip in August, the SPX was bought, indicating that the bulls are still in control and the path of least resistance remains up.
- Historical Performance of US Treasuries: The report points out that US Treasuries have never seen negative returns for three consecutive years in the history of the US republic.
- Long-term Investment in Bonds: The author suggests that bonds could be a great long-term investment towards the end of the year, but advises patience as the setup isn’t quite there yet.
Market Sectors and Countries
- Turkey’s Strength: The report highlights Turkey’s strength and its potential to break out to new multi-year highs soon due to its geopolitical position and Nato membership.
- Strongest Returning Sectors: The sectors with the strongest returns also have the strongest breadth, with energy, oil services, and tech standing out.
- Tech Value in NRDY: NRDY, a founder-led company that recently transitioned from single-use product sales to subscriptions, is highlighted as a potential tech value.
Actionable Insights
- Investigate the Potential of the US Dollar: Given its bullish trend, the US dollar could be a key area of focus for investors.
- Consider Long-term Investment in Bonds: Despite the current setup not being ideal, bonds could be a great long-term investment towards the end of the year.
- Explore Opportunities in Turkey and Tech Sector: With Turkey’s ETF poised for new multi-year highs and the tech sector showing strong returns, these could be areas worth exploring for investment opportunities.
