Market Direction Model - Model switches to BUY on June 12, 2024

Published:

12 Jun 2024 08:36 ET

MDM has switched to a BUY signal. Tech juggernauts and other leading names looking decent for further upside. Wednesday's CPI came in cool at 0.1% below expectations across the board for both normal and core MoM and YoY. Investors will focus on the Fed’s economic projections, the dot-plot, for the rest of the year during Powell's testimony at 2pm EST today. It could signal one, two, or even no cuts ahead. Before today's CPI number, Fed officials were looking for two cuts this year while 10 were looking for one or none.

The tally has been a series of 3 hot CPI reports, one cool CPI report, one cool PCE report, and one hot nonfarm payrolls report where both wages and unemployment came in 0.1% above estimates. Given the election year and today's cool CPI report, this gives the Fed room to lower rates twice more this year. Stealth QE remains intact.

M2 is starting to grow once again:

US treasury debt issuance is soaring not just because of the growing US debt mountain fed by an annual $1.7 trillion deficit but also some $9 trillion of debt is maturing that requires refinancing for which the US requires more stealth QE. Expect higher consumer and asset prices most every nation is inflating their own respective debt bubbles with maturing debt that needs to be constantly rolled over. All aboard the inflation mega-trend train via stealth QE.

Suggested ETFs (Note: Many members buy the standard ETFs or their preferred ETFs. This list serves as a guide as to which ETFs we think may outperform, but the key point is to be on the right side of the market regardless of which ETF or ETFs one chooses.)

1-times

SPY (S&P 500)

QQQ (NASDAQ-100)

2-times

SSO (S&P 500)

QLD (NASDAQ-100)

3-times

UPRO (S&P 500)

TQQQ (NASDAQ-100)

TECL (Direxion Trust Technology)

NOTE: This is a suggested list. Investors may wish to become acquainted with the full range of available ETFs, and should make an effort to understand how these ETFs are created and what their components are, as well as being aware of the downside risks involved, especially with leveraged ETFs. Certain ETFs may be more appropriate depending on one's risk tolerance levels. Typing in keyword 'ETF' into the FAQ keyword search bar or going here https://www.virtueofselfishinvesting.com/faqs/search?p=1&q=etf and visiting this site https://etfdb.com/ can be instructive.

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