September 22, 2023

Markets:

Stock futures rose slightly Friday, but the market is still poised to end the week with steep losses.

Those moves followed a three-day losing streak for all three stock averages as investors reacted to a signal from the Federal Reserve that it intended to keep interest rates higher for longer. These lofty levels could put pressure on risk assets like equities.

The S&P 500 and the tech-heavy Nasdaq Composite are down 2.7% and 3.5% this week, respectively, on track for their worst weekly performance since March. It would also be their third negative week in a row. The blue-chip Dow has dipped 1.6% in the meantime.

Bond yields surged after the central bank forecast one more rate hike for 2023. The benchmark 10-year Treasury yield popped 15 basis point to hit a high of 4.498%, its highest level since 2007. Meanwhile, the 2-year rate topped 5.2%, touching its highest level since 2006.

Portfolio:

We approach the final trading session of the week with positions in CHWY, TSLL, CLF, DKNG, and ATEN. It's important to recall our observation from last week: historically, the last 10 days of September have been one of the least favorable periods in the market's annual calendar. This presents an ideal moment for short-term trades that capitalize on downward movements while also considering longer-term positions during this downturn.

From a technical standpoint, the market continues to exhibit strength. Despite the prevailing narrative of a potential recession or selloff, the technical indicators and trend maintain their bullish stance. The contrarian perspective suggests that the path of least resistance points upward, and we remain convinced that a significant market move is on the horizon to conclude the year. While this is not an absolute commitment, it's the outlook we currently hold.

So far in 2023, our service's overall analysis has proven to be quite accurate. We will stay the course by relying on technical analysis and following the market's trend. The upcoming week promises ample opportunities, as we anticipate a shift in sectors and opportunities that position traders for year-end trades. The fourth quarter is traditionally an exciting period for traders, and we're excited about the potential it holds. Exciting times lie ahead for our community!