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October 29, 2024

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When I was growing up, I loved Choose Your Own Adventure books. I see the world in shades of gray instead of black-and-white, so I was immediately drawn to the seemingly endless scenarios that the main characters could experience as I made different choices for them.

As investors, we often get so caught up in one particular market narrative that we are unable to think “outside the box” and consider other possible outcomes. Successful investors I’ve worked with have been exceptionally good at looking at all the possibilities, challenging their own investment thesis by opening themselves up to other options.

Today, we’ll walk through four potential outcomes for the S&P 500 index over the next six to eight weeks. As I share each of these four future paths, I’ll describe the market conditions that would likely be involved, and I’ll also share my estimated probability for each scenario.  

By the way, we ran through four scenarios for the S&P 500 back in July, and you may be surprised to see which scenario actually played out!

And remember, the point of this exercise is threefold:

  1. Consider all four potential future paths for the index, think about what would cause each scenario to unfold in terms of the macro drivers, and review what signals/patterns/indicators would confirm the scenario.
  2. Decide which scenario you feel is most likely, and why you think that’s the case. Don’t forget to drop a comment and let me know your vote and what you think will cause that scenario to play out.
  3. Think about how each of the four scenarios would impact your current portfolio. How would you manage risk in each case? How and when would you take action to adapt to this new reality?

Let’s start with the most bullish scenario, where the S&P 500 keeps going with a consistent pace and breaks above 6000 by early December.

Option 1: The Super Bullish Scenario

The S&P 500 has experienced a remarkably strong run off the low in early August. This first scenario would mean a continuation of the pace of the current trend, suggesting the SPX would remain above a trendline drawn from the August and September lows. This scenario would include the S&P breaking above 6000 for the first time, and by early December, we’d be wondering how we made it through an entire calendar year with the biggest drawdown sitting at just less than 10%.

Dave’s Vote: 5%

Option 2: The Mildly Bullish Scenario

Let’s say that Trump wins a second term, and investors see that as a fairly pro-business and pro-market outcome. At the same time, however, new economic data and the November Fed meeting leave investors a little skeptical of the Fed’s ability to navigate the soft landing scenario into early 2025.

The second scenario would mean we drift a bit higher, but breadth conditions break down as investors gravitate to Magnificent 7 stocks and other safe havens as the VIX pushes above 20. We don’t see a major correction into early December, but it still feels like one is just around the corner and everyone’s talking about overvaluations and a potential Q1 pullback.

Dave’s vote: 25%

Option 3: The Mildly Bearish Scenario

A Harris victory could certainly weigh on the markets as we progress through Q4, as we realize how much investors had been pricing in a Republican White House. Skepticism of the Fed reaches a fever pitch as we’re no longer talking about a potential soft landing, but rather when the next major correction will play out. Volume and breadth divergences that have been growing in October continue to play out, and a 2018-style Q4 drop becomes our reality in 2024.

Dave’s vote: 50%

Option 4: The Very Bearish Scenario

You always need a “doomsday” scenario, where things get bad and stay bad. What if the S&P 500 starts selling off as a frustrating earnings season leads into a contentious election and a November Fed meeting raises more questions than answers? Paul Tudor Jones famously remarked, “Nothing good happens below the 200-day moving average.” And in this scenario, that’s exactly what we’re facing in December as we wonder where how and why the normal Q4 rally is nowhere to be seen.

Dave’s vote: 20%

What probabilities would you assign to each of these four scenarios? Check out the video below, and then drop a comment with which scenario you select and why!

RR#6,

Dave

P.S. Ready to upgrade your investment process? Check out my free behavioral investing course!


David Keller, CMT

President and Chief Strategist

Sierra Alpha Research LLC


Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.

The author does not have a position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author and do not in any way represent the views or opinions of any other person or entity.

In the fast-paced world of trading, success often hinges on screening for the best ideas in real-time to find trading opportunities. At OptionsPlay, we are committed to providing our users with the latest cutting-edge tools to automate the manual process of researching options trades. This is why we are thrilled to announce a groundbreaking partnership with StockCharts.com, a leader in technical analysis, charting, and screening.

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As part of today’s coverage of the Magnificent Seven we remind you when the big mega-caps are reporting and give you are current perspective of each. We also cover all of the Magnificent Seven in the short and intermediate terms with daily and weekly charts.

Carl gives us his opinion on where the market is headed and what DecisionPoint signal tables are telling us about market conditions. He also covers asset classes Gold, Dollar, Gold Miners, Crude Oil, Bonds and Yields.

Erin takes the controls and enlightens us on current sector rotation trends. Momentum may be failing on some of the sectors, but Silver Crosses are still intact.

The pair finish with a look at viewer symbol requests that included RIVN, ON, SMCI and more!

01:52 DP Signal Tables

04:44 Market Overview

14:50 Magnificent Seven

24:48 Questions

30:09 Sector Rotation

35:49 Symbol Requests

Be sure and check out our subscriptions! The DP Alert sets the table for your trades giving you the current trend and condition of the market each market day. DP Diamonds give you stock/ETF Picks and the Scan Alert Service gives you the results of all of our scans. Find the best trades and market conditions! Subscribe HERE! Or try us out for two weeks FREE using coupon code: DPTRIAL2.


Introducing the new Scan Alert System!

Delivered to your email box at the end of the market day. You’ll get the results of our proprietary scans that Erin uses to pick her “Diamonds in the Rough” for the DecisionPoint Diamonds Report. Get all of the results and see which ones you like best! Only $29/month! Or, use our free trial to try it out for two weeks using coupon code: DPTRIAL2. Click HERE to subscribe NOW!


Learn more about DecisionPoint.com:


Watch the latest episode of the DecisionPointTrading Room on DP’s YouTube channel here!


Try us out for two weeks with a trial subscription!

Use coupon code: DPTRIAL2 Subscribe HERE!


Technical Analysis is a windsock, not a crystal ball. –Carl Swenlin


(c) Copyright 2024 DecisionPoint.com


Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.

DecisionPoint is not a registered investment advisor. Investment and trading decisions are solely your responsibility. DecisionPoint newsletters, blogs or website materials should NOT be interpreted as a recommendation or solicitation to buy or sell any security or to take any specific action.


Helpful DecisionPoint Links:

Trend Models

Price Momentum Oscillator (PMO)

On Balance Volume

Swenlin Trading Oscillators (STO-B and STO-V)

ITBM and ITVM

SCTR Ranking

Bear Market Rules


In this video, Dave digs into five market breadth indicators every investor should track as we navigate a volatile period including Q3 earnings, the US elections, and the November Fed meeting. He breaks down key insights on each of the five charts, talks about why breadth indicators are equal-weighted, and relates all of this back to the most important chart of all: the daily S&P 500 chart.

This video originally premiered on October 28, 2024. Watch on our dedicated David Keller page on StockCharts TV!

Previously recorded videos from Dave are available at this link.

A British lawmaker has been suspended by the governing Labour Party after footage appeared to show him punching a man repeatedly on the street.

Police are investigating the alleged attack by Mike Amesbury on Friday night, which first came to light after social media footage showed a brawl in the street following the alleged attack.

Subsequent surveillance footage, obtained by the Daily Mail newspaper and published Sunday, appears to show Amesbury talking to a man before punching him in the face and then attempting to strike him again repeatedly on the ground.

Labour said Amesbury is assisting police with their inquiries, and that they have suspended the backbencher “pending an investigation.”

Amesbury has been an member of parliament (MP) since 2017 in Cheshire, northwest England, where the alleged incident took place. He remains an independent member of the House of Commons after losing the party whip.

The lawmaker said in a statement, released before the additional footage was published by the Mail, that he was “involved in an incident that took place after I felt threatened on the street following an evening out with friends.”

He said he had “contacted Cheshire Police myself to report what happened during the incident.”

Cheshire police said in a statement: “A 55-year-old man has been voluntarily interviewed under caution by police in relation to this incident. He has since been released pending further enquiries.”

Labour swept to power in a July general election after 14 years in opposition, winning 411 seats for a commanding majority. Nine of those MPs have since had the whip removed or resigned from the party.

The populist Reform UK party have called for Amesbury to resign and allow a by-election in his seat to take place, which would be the first electoral test of the new government if it were to take place.

MPs are entitled to remain in the Commons after losing the whip. A recall petition in their constituency, which could trigger a by-election, could take place if they were to receive a prison sentence.

This post appeared first on cnn.com

A major manhunt is underway in northern Austria after a hunter allegedly fatally shot two people and fled the scene, local police said Monday.

Franz Hofer, mayor of Kirchberg ob der Donau, was killed in the village of Altenfelden in Austria’s rural Muhlviertel region, near the border with Germany and the Czech Republic.

A large-scale police operation with helicopters and special forces is underway, she said. The suspect is believed to be armed and local residents have been told to stay indoors.

“Unfortunately, we assume that the perpetrator we are looking for could be carrying the weapon,” Handelbauer said, according to local media. A dispute over hunting rights appeared to have sparked the incident, police added.

According to Kronen Zeitung, a local outlet, the suspect was known to hunters in the area. “He was a difficult person,” said a hunter from the area who wished not to be named.

The shooting shocked officials at the People’s Party (OVP) regional headquarters in Linz. “It’s madness,” said state party leader Florian Hiegelsperger.

Herbert Sieghartsleitner, the state hunting master, said the incident was “unbelievable.”

“I am deeply shocked by what has happened. I knew Franz Hofer very well personally,” he said, according to Kronen Zeitung.

This post appeared first on cnn.com

British far-right political activist Tommy Robinson has been jailed for 18 months after he admitted to being in contempt of court by repeating false accusations about a Syrian refugee, according to court documents.

Robinson, whose real name is Stephen Yaxley-Lennon, admitted on Monday to breaching UK court rules 10 times.

Robinson, the founder of the now-defunct anti-immigration English Defence League (EDL), was accused of repeating false allegations that caused him to lose a libel suit in 2021.

The initial libel case related to Robinson making false accusations against a Syrian schoolboy who was attacked in an incident shared widely on social media. In 2018, footage emerged showing the 15-year-old – a refugee from Syria – being taunted, grabbed by the throat and pushed to the ground, as other students at his school in Huddersfield, northern England, looked on.

At the time, Robinson made allegations against the teenager in a number of social media videos, which he then deleted, falsely claiming the teen attacked English girls. The far-right figurehead later admitted to posting a fake photograph purporting to show violence by a Muslim gang.

At Monday’s sentencing hearing, a judge at London’s Woolwich Crown Court said Robinson breached court rules by publishing a film, called “Silenced,” on social media in which he repeated the libelous allegations. He also played the film publicly in London’s Trafalgar Square at a rally of his supporters.

“The breaches were not accidental or negligent or merely reckless,” Justice Johnson said during the sentencing hearing. “There was a degree of sophistication in the breaches in that they involved the planned release of material in a manner that was designed to seek to achieve maximum coverage.

“Nobody is above the law,” the judge added.

This post appeared first on cnn.com

A sense of urgency has been growing after the role of women emerged as a dominant theme when Catholics from across the globe were canvassed for their views ahead of a meeting of bishops and lay people – a synod – which formally concluded Sunday.

The final Synod assembly document, approved by Pope Francis, said women must be given all the opportunities that church law provides to act as leaders, but left the possibility of ordaining women as deacons as an “open” question which needs further reflection.

Frustrations about the slow pace of reform bubbled into the open during the assembly when the pope’s doctrine adviser ruled out ordaining women as deacons and then failed to turn up to a meeting on the topic. He later apologized and held a 90-minute meeting with members of the assembly.

Some are unimpressed by what they see as the Vatican kicking the topic of deacons into the long grass.

Phyllis Zagano, a research professor at Hofstra University in New York and expert on female deacons, said that “there is abundant evidence of the sacramental ordinations of women as deacons in the Church, East and West, to the 12th century” and that “eventually a decision must be made.”

Francis has also faced criticism recently for expressing what one Belgian Catholic university denounced as “reductive” views on the role of women in the church. In an interview earlier this year, he ruled out the possibility of ordaining women deacons, who can carry out functions like a priest apart from saying Mass and hearing confessions.

The problem in the church is exacerbated given women make up a majority of churchgoers while an all-male hierarchy controls decision making. Furthermore, Catholic teaching bars women from ordination to the priesthood, a decision that Francis has maintained, although he has allowed studies of female deacons.

During previous papacies the question of ordaining women was not even up for discussion. The big difference now is that the 87-year-old Argentinian pontiff has shown he is willing to listen carefully to the voices of Catholics.

During his pontificate, Francis has also been trying to make cracks in the Vatican’s glass ceiling. He has chosen women to senior positions in the church’s central administration, including a religious sister to help run the synod and the first women members to sit on the board of a powerful Vatican department that decides on bishop appointments.

For the first time, women were also included as voting members, with 54 female voters among more around 360 delegates. One of those was Julia Oseka, 23, who is studying theology and physics at St Joseph’s University in Philadelphia, Pennsylvania, and is the youngest woman ever to be a voting member of a Vatican synod.

Oseka added that while she sometimes felt “frustrated” about the “slow pace” of decisions, some parts of the church “struggle” when it comes to the inclusion of women, and it was important to maintain unity.

Francis’ approach is also informed by the resistance to any reform to women’s roles: The declaration from the Vatican assembly on women received 97 “no” votes, the most of any section in the final document.

She said the pope had recognized that the question of female deacons cannot be “closed” and that it was important for the Catholic Church to send a message to the world where there is rising discrimination and violence against women.  “If we don’t take a strong stand, it’s contradicting our own message,” she said.

Nevertheless, for a church which thinks in centuries what may seem like small steps to those on the outside are major leaps forward for many inside.

This post appeared first on cnn.com

Georgia’s President Salome Zourabichvili has called on citizens to protest the results of a disputed election in an attempt to save the country’s “European future.”

Tens of thousands of Georgians massed outside the parliament on Monday night, calling for the annulment of Saturday’s parliamentary election that the opposition has said was rigged with Russia’s blessing.

Speaking soon after addressing crowds in the capital, Tbilisi, Zourabichvili said the protesters “are coming very peacefully to say, ‘We have voted, we want our votes to be defended, and we want our European future … to be defended.’”

The Russia-friendly Georgian Dream party, founded by the reclusive billionaire Bidzina Ivanishvili, claimed victory after a day of voting marred by violence and disorder at polling stations across the country. The Central Election Commission (CEC) said it had secured nearly 54% of the vote.

Asked why she is refusing to recognize the results of the election, Zourabichvili said Georgian Dream had used “all the instruments” at its disposal to rig the election and called for an international investigation.

“We encourage Georgia’s governing officials to consider the relationship they want with the Euro-Atlantic community, rather than strengthening policies that are praised by authoritarians,” said State Department spokesperson Matthew Miller.

Zourabichvili said the election results were difficult to believe because actions taken this year by Georgian Dream have stalled the country’s bid to join the European Union, which polls suggest more than 80% of Georgians support.

“Every move the Georgian government has made this year is clearly designed … to make sure that we don’t get the approval of the European leaders,” Zourabichvili said.

In May, the government passed a “foreign agent” bill, referred to by Georgians as the “Russian law” because of its similarities to legislation passed by Russian President Vladimir Putin. Critics say the bill, which requires organizations receiving more than 20% of their funding from abroad to register as a “foreign agent,” is designed to shut down watchdogs who call the government to account.

European leaders criticized the bill and have since frozen Georgia’s accession process, just months after it was offered EU candidate status.

Zourabichvili disagreed. “The Europeans have clearly said to the Georgian authorities … that you cannot pretend that you will join the EU (while) doing what you are doing,” she said.

During the election campaign, Ivanishvili – who made his fortune in the years after the collapse of the Soviet Union – threatened to imprison his political rivals and ban the main opposition party, the United National Movement (UNM), if Georgian Dream won another term.

The UNM was founded by former President Mikheil Saakashvili, who has been jailed since 2021 for abuse of power while in office.

Asked if she feared similar political retribution, Zourabichvili said she is more worried about the fate of Georgia and what will happen “if things are in the hands of the Georgian Dream.”

“My personal future in that is not as important as the future of Georgia,” she said.

This post appeared first on cnn.com

A German-Iranian national and longtime US resident has been executed in Iran after being convicted of terrorism offences, according to Iranian state media citing the country’s judiciary-affiliated Mizan news agency.

Jamshid Sharmahd, 69, was executed Monday morning for “planning and orchestrating a series of terrorist acts,” state-run IRNA and Press TV reported. His execution sparked condemnation from the United States and Germany.

Sharmahd’s daughter Gazelle has repeatedly said her father is innocent and that he faced a sham trial due to his political activism and criticism of the Islamic Republic.

Sharmahd was arrested in 2020 by Iranian authorities who claimed he headed a group accused of a deadly 2008 bombing in the city of Shiraz, according to state-run news agencies ISNA and IRNA.

He was sentenced to death in 2022 for “corruption on Earth”, sparking widespread condemnation from human rights groups and Western governments.

“He has been sentenced to death after a legal proceeding that has been widely criticized as a sham trial,” Vedant Patel, the US State Department’s principal deputy spokesperson said in a briefing last fall. Amnesty International also described the trial as “grossly unfair.”

Following the news of his execution, German foreign minister Annalena Baerbock said that Sharmahd’s “murder” showed Tehran to be an “inhumane regime” that “uses death as a weapon.”

Baerbock said the execution would have “serious consequences.”

The United States’ Office of the Special Envoy for Iran said it was looking into reports of Sharmahd’s execution and said his killing would “represent the latest abhorrent act in the regime’s long history of transnational repression and accelerating rate of executions.”

Sharmahd’s “kidnapping and rendition, as well as sham trial and reports of torture, were reprehensible,” the envoy’s office added.

Abram Paley, the US Deputy Special Envoy, last year met with Sharmahd’s family to discuss his imprisonment and death sentence.

This post appeared first on cnn.com