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October 2024

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It’s no secret that the House has had a tough two years.

One speaker, Kevin McCarthy (R-Calif.), got ousted mid-term, and his successor, Speaker Mike Johnson (R-La.), survived a coup attempt only because Democrats spared him. The most basic procedural votes have become herculean tasks. Legislative output has cratered.

Now, with Election Day nearing and the Democrats within a few seats of the majority, some see a chance to try to fix what’s broken by taking up a reform push they started after winning the majority six years ago — but clearly never finished.

Moments when power changes hand offer the best chance at reshaping how Congress acts, and that is doubly so when a new leader takes charge.

In 2018 a small group of moderate Democrats used the opportunity to create a temporary House committee tasked with modernizing the chamber. The committee lasted four years, received plaudits for some important-but-modest changes and has since had its work folded into a subcommittee.

But for House Democrats, Minority Leader Hakeem Jeffries (D-N.Y.) as speaker could mark a sea change, especially compared with six years ago, when Rep. Nancy Pelosi (D-Calif.) returned to power.

Pelosi had already served four years as speaker (2007-2010) and had been leading Democrats for 16 years, with a very experienced leadership team that was more bound by tradition. Just 12 years into office, Jeffries, 54, could be more open to trying out new ideas, according to several former aides and retiring lawmakers.

Jeffries would have his work cut out for him. Even Democrats acknowledge that, in their previous four years of holding the majority, the institution wasn’t exactly performing up to par. Rank-and-file lawmakers have an endless list of complaints, from scheduling conflicts, to committee chairs disregarding junior members, to leadership ignoring the work of those legislative committees.

“While tremendous progress has been made, there is still much more work to be done,” a group of 10 think tanks and congressional experts, dubbing themselves the “Fix Congress Cohort,” wrote in a recent letter to congressional leadership.

There is no shortage of proposals. The Washington Post’s editorial board this week highlighted a working group of former members of Congress, run through the University of Pennsylvania, that is circulating ideas about how to change the cultural norms.

“Partisan conflict explains a lot of the Hill’s dysfunction, but so do relatively fixable internal rules, written and unwritten,” The Post’s editorial board wrote.

Just as some of the most interesting ideas for overhauling the Senate came from former senior GOP staff, a similar survey of former House Democratic aides offered up some interesting and surprising ideas.

Speaking on the condition of anonymity to avoid any blowback from current or former employers, these ex-aides generally diagnose the same problem: The average lawmaker feels removed from the process, and even when they can come up with bipartisan ideas that have support, their bills languish.

These half-dozen former aides served in high leadership posts, ran legislative committees or worked as chief of staff for rank-and-file Democrats, each with more than a decade of experience. Their ideas covered many aspects of how lawmakers exist, from what committees they serve on to how much they travel and to how often they are fed during meetings.

One former aide noted the dilemma of many junior lawmakers receiving two and sometimes three committee assignments. This can lead to lawmakers having legislative hearings at the same time, forcing them to either skip one or race around the office buildings trying to attend part of each hearing. And because so many lawmakers receive so many assignments, these committees are larger than ever and hearings take too long because every member is allowed to ask at least five minutes of questions.

If lawmakers received fewer committee assignments, their daily lives would be easier to manage and they could drill down on fewer issues to develop real expertise, according to the former aide, who served as chief of staff to two rank-and-file Democrats.

In addition to an avalanche of committee work, lawmakers have created an endless list of “congressional member organizations,” groups that serve as caucuses supportive of issues and causes.

These are well meaning but also serve as passing attempts at checking political boxes rather than actual policymaking. Rep. Greg Landsman (D-Ohio), a freshman, serves on 21 of these caucuses, while another freshman, Rep. Michael Lawler (R-N.Y.), serves on almost 60.

Two former Democratic chiefs of staff suggested tightening the reins on these ad hoc groups — ranging from the Wine Caucus to the left-flank Progressive Caucus — by cutting back on their funding, as they eat away a member’s time and also sometimes drive ideological division within internal party ranks.

Another common complaint is how hard it is for legislation, despite bipartisan support, to get to the full House for a vote.

Data shows the shrinking ambition in the House. Back in 2016 — the last year when Republicans ran the House against a Democratic president — the chamber approved 659 bills and resolutions. Through the first eight months of 2024, the House had approved just 353 measures.

Centrist Democrats, working with moderate Republicans, tried to create a fast-track calendar six years ago for bills with wide support, but that practice faded away quickly and instead the legislative calendar is dominated by the speaker and his leadership team.

The “suspension calendar,” as the current process is known for passing noncontroversial bills quickly with a two-thirds majority, needs to be updated so that more bills with broad support can get to the floor for full votes. Most rank-and-file lawmakers like to tout that their chamber approved one of their bills and, if it does not make it into law, they will try again next year to win Senate approval and a presidential signature.

Another idea to make legislative committees work together was a formal requirement that each panel’s full membership attend either a retreat outside of Washington or an official trip abroad to study an issue together.

These congressional delegation trips are known for creating lasting bonds among lawmakers, while also opening their eyes to how policy made in Washington impacts the real world.

Some former aides believe it’s time to come up with a better acknowledgment of remote work. At the height of the pandemic, the proxy voting system seemed appropriate to allow social distancing and prevent members from traveling and potentially spreading the coronavirus.

Lawmakers were supposed to certify they were unable to travel to Washington out of fear of attracting or spreading the virus, allowing a member in the Capitol to cast their vote for them. Over time it turned into an excuse to skip work, as some Republicans once trekked to the southwest border with ex-president Donald Trump and some Democrats flew on Air Force One with President Joe Biden to Michigan.

Republicans eliminated the practice altogether after winning the majority in 2022, but as one former Democratic aide argued, the current policy can be unnecessarily harsh. A woman who cannot travel because of pregnancy complications should be allowed to cast her vote, the former aide said. A bipartisan pair of House members have proposed proxy voting for up to six weeks after giving birth.

Just as some ex-GOP staff in the Senate want to curtail political showboating, one former House Democratic aide suggested that once a month, or every few months, one bill should come to the floor in a debate that would not be televised.

The visiting public and press would still be in the chamber to monitor the legislative debate and votes, but the TV cameras would be off to make lawmakers simply debate among themselves.

Finally, another former aide had a striking idea: Eliminate food at most meetings inside the Capitol complex. Food and beverage are standard at many meetings. A large portion of it goes to waste and, the aide argued, offering the food tends to make meetings go longer than necessary.

Most lawmakers and aides agree that Congress needs a more comprehensive overhaul than some of these modest proposals, but some small steps would help.

As the “Fix Congress” group noted in its memo, “Gradual progress is more likely than sudden and comprehensive approaches.”

This post appeared first on washingtonpost.com

LATROBE, Pa. — Seventeen days from the election, here in arguably the most decisive swing state, Republican presidential nominee Donald Trump spent the first 10 minutes of his speech without mentioning politics.

Instead, he delivered a long tribute to Arnold Palmer, the late golfer who was born here and is the namesake of the airport where Trump was speaking. Trump’s soliloquy about Palmer included an account of how other athletes reacted to seeing him in the showers.

“Arnold Palmer was all man. And I say that in all due respect to women and I love women. But this guy, this guy, this is a guy that was all man. This man was strong and tough. And I refused to say it, but when he took showers with the other pros, they came out of there, they said, ‘Oh my God, that’s unbelievable,’” Trump said.

“I had to say it,” Trump continued.

At about 10 minutes, the digression about Palmer lasted roughly as long as Vice President Kamala Harris’s entire speech at a get-out-the-vote event earlier Saturday in Detroit. Trump’s speech was filled with asides, abrupt changes of subject and profane and personal attacks.

Trump has expressed frustration with his accelerated campaign schedule and shown impatience with his prepared scripts and advisers encouraging him to stick to issues such as the economy and immigration. Trump had other subjects in mind Saturday and spoke freely about a variety of disconnected themes.

He interrupted his own message about the border to praise Rep. Byron Donalds (R-Fla.) and discuss the color of billionaire donor and surrogate Elon Musk’s MAGA hat. He also gave a shout-out to legendary center fielder Willie Mays, who died in June, and railed against Sen. Elizabeth Warren (D-Mass.). He made up a story about an imaginary cartel leader named Jose Rodriguez using an imaginary phone app to call the U.S. government about smuggling people over the border.

When he finally focused on his opponent in the presidential race, Trump turned vulgar.

“You’re a shit vice president,” he said to cheers. Some in the crowd shouted out, echoing the profanity.

Moments later, Trump asked the crowd about his plane: “How did the flyover look? Good?”

As Trump called Harris a “radical left Marxist,” a woman in the crowd yelled: “She’s a f—ing liar!”

Trump acknowledged the indiscretion while explaining he had received a letter from evangelical leader Franklin Graham encouraging him to refrain from swearing.

“You can’t put the same emphasis,” he said. “So tonight I broke my rule.”

At another point, as Trump criticized the Biden administration, he said: “Everything they touch turns to —”

“S—!” the crowd responded.

Trump frequently meandered during his hour-plus speech. As he railed about Harris replacing President Joe Biden on the Democratic ticket, he paused and commented on his hair, as he looked at the screen displaying his live speech. “Excuse me, I’m going to recomb my hair, do you mind?” he said. “I’m going to recomb my hair, Mr. Future Senator,” he added, a reference to U.S. Senate candidate David McCormick of Pennsylvania.

Trump started the week spending 39 minutes of a town hall playing music instead of speaking. He has jumped abruptly between topics in recent appearances and on social media. In Latrobe, he compared his proposed tax exemptions to the invention of the paper clip.

Harris on Saturday questioned Trump’s coherence.

“Have you noticed he tends to go off script and ramble?” she said in Georgia. “And generally for the life of him cannot finish a thought. And he has called it ‘the weave.’ But I think we here will call it nonsense.”

The rally also touched on familiar themes for Trump, including his vow to impose “massive tariffs” and his vilification of undocumented immigrants, falsely portraying them as mostly criminals from “insane asylums and mental institutions.”

He disparaged foreigners in inflammatory terms, comparing immigration with an “invasion” and saying he would “liberate” the country. He misrepresented Immigration and Customs Enforcement statistics to falsely claim thousands are “on the loose,” and he repeated his pledge to launch a mass, militarized deportation operation modeled on a 1950s program.

Trump at one point returned to the topic of Palmer when favorably remarking on the appearance of his expanded security detail.

“Look, people as far as you can see. They give you a little extra security nowadays. I got more machine guns than I’ve ever seen. Look at these guys,” he remarked.

The crowd began to cheer, “USA!”

“They look like Arnold Palmer. They look like Arnold. Can’t look better than Arnold,” he said.

Maegan Vazquez contributed to this report.

This post appeared first on washingtonpost.com

ATLANTA — Vice President Kamala Harris criticized former president Donald Trump over the issue of abortion access at a rally in Atlanta on Saturday, pointing out that the family of Amber Thurman — a Georgia woman who died in 2022 after she did not receive proper medical care because of abortion restrictions — was in the audience.

In the waning weeks of the presidential campaign, Harris used her time in Atlanta to emphasize the Republican nominee’s role in appointing Supreme Court justices who overturned Roe v. Wade, which had guaranteed the constitutional right to an abortion. The comments came the week after the Georgia Supreme Court moved to restore a six-week abortion ban.

Democrats see abortion access as a driver for voter turnout this election cycle. Harris told the Atlanta audience that Trump “still refuses to take accountability for the pain and the suffering he has caused,” and has failed to acknowledge “the pain and suffering” that has ensued as a result of abortion restrictions around the country.

Harris played a clip of Trump at an all-women Fox News town hall, in which the moderator said Thurman’s family had just participated in a call hosted by the vice president’s campaign.

“Oh, that’s nice,” Trump said in the clip. “We’ll get better ratings, I promise.”

Harris said Trump had “mocked” Thurman’s family in the clip and later asked, “Where is the compassion?”

“What we see continually from Donald Trump is exactly what that clip shows,” Harris told the audience. “He belittles their sorrow, making it about himself and his television ratings. It is cruel. And listen, I promised Amber’s mother that we will always remember her story and speak her name.”

The crowd then began to chant alongside Harris: “Amber Nicole Thurman.”

Harris also repeated her assertion that Trump is exhausted from campaigning after several canceled appearances, and called into question Trump’s coherence.

“He is only focused on himself, and now he’s ducking debates. And canceling interviews because of exhaustion. And when he does answer a question or speak at a rally, have you noticed he tends to go off script and ramble? And generally, for the life of him, cannot finish a thought,” she said.

Harris told reporters earlier Saturday that she was responding to Trump’s comments at her rallies more frequently because “he’s becoming increasingly unstable and unhinged, and it requires a response.”

“I think the American people are seeing it, witnessing it in real time. And we must take note of the fact that this is an individual who wants to be president of the United States,” Harris said. “And I think the American people deserve better than someone who actually seems to be unstable.”

At a smaller campaign event earlier Saturday in Detroit, Harris said that voters need to “just watch” Trump’s rallies if they remain undecided.

“We stand for the idea that the true measure of the strength of a leader is not based on who you bring down, it’s on who you lift up,” Harris said, adding that at rallies, Trump “spends full time talking about himself and mythical characters, not talking about the working people, not talking about you, not talking about lifting you up.”

Harris’s events in both Detroit and Atlanta included celebrity cameos.

The recording artist Lizzo, speaking in Detroit, pointed to her roots and pushed back on Trump’s recent comments insulting Detroit.

“They say that if Kamala wins, the whole country will be like Detroit,” Lizzo said during the event. “Proud like Detroit. Resilient like Detroit. We’re talking about the same Detroit that innovated the auto industry and the music industry, so put some respect on Detroit’s name.”

Harris later took the stage at the event wearing a T-shirt that said “Detroit -VS- Everybody.”

Republican National Committee Chairman Michael Whatley said in a statement after the Detroit rally that Harris “needs Lizzo on the campaign trail to hide the fact that Michiganders were feeling good under President Trump.”

In Atlanta, R&B singer Usher rallied for Harris.

“Let me make certain that I’m talking to all my ATLiens out there,” he said, energizing the thousands of rallygoers. “We need everyone to get out there and support this campaign.”

“We love you, Usher!” one attendee yelled out.

“I love you more, but I love Kamala Harris even more,” Usher said. “I want her to be our next president of the United States.”

Vazquez reported from Washington and Wells from Detroit.

This post appeared first on washingtonpost.com

NORTH LAS VEGAS, Nev. — Standing in a high school gymnasium 10 miles from America’s gambling capital, former president Barack Obama implored any undecided or hesitant voters to place a figurative bet on Kamala Harris.

“Sometimes I talk to folks who don’t think it’s going to make a difference whether Kamala Harris or Donald Trump wins,” Obama said in front of a rowdy crowd of thousands on the first day of early voting in Nevada. To them, he said: “Do not sit back and hope for the best. Get off your couch and vote.”

The rally in North Las Vegas was the second stop in a busy stretch of battleground state travel for the former president, who remains one of the nation’s most popular Democrats. Harris’s campaign is increasingly deploying Obama as its not-so-secret weapon in the race’s waning weeks, leaning on him to whip up enthusiasm in what could be a historically close contest.

In his 40-minute speech, Obama sought to underline the ways politics can have a tangible impact — and how an election “can make your life better or it can make it worse.” The coronavirus pandemic was the ultimate example, Obama argued, accusing his successor of mishandling the crisis and causing hundreds of thousands of avoidable deaths.

“People’s grandmothers, people’s fathers, people’s moms who would have been alive if Donald Trump had just paid attention and tried to follow the plan that we gave him,” Obama said.

Sure, he added, a president won’t fix the country’s most intractable problems overnight, but Obama said that Harris would be a leader who “cares about you, who listens to ordinary people, who listens to people who are experts in these areas.”

Harris’s campaign has also looked to Obama to help juice her support among men, especially young men of color who appear to be more open to Trump’s messaging than that of past Republican nominees.

So far, Obama has employed a multipronged approach. He bluntly admonished men who may have voted for him in 2008 and 2012 but who might be reticent about casting their ballot for a woman — “speaking some truths,” he called it at a stop in Pittsburgh, where his frank reproach made headlines.

In North Las Vegas, he upbraided “some men who seem to think Trump’s behavior of bullying people or putting them down is somehow macho or a sign of strength.”

But Obama has also begun taking Trump on more directly than ever, mocking the Republican candidate’s bizarre behavior and mental fitness. He has alluded to the long-standing animosity between himself and Trump, who fueled his early political career by falsely questioning Obama’s birthplace.

“When it comes to health care, Donald Trump has got one answer,” Obama said. “He wants to end the Affordable Care Act. He doesn’t even really know what the Affordable Care Act is or how it works. He just knows I did it.”

But even as he needled Trump for “loony” behavior, Obama called for a return to character and values, drawing a stark contrast with the Republican nominee’s comments earlier in the day at a vulgar rally in Pennsylvania, where he referred to Harris as “a shit vice president.”

Attendees at Obama’s rally in North Las Vegas cheered his barbs at Trump, and some welcomed the tough love he directed at men who “just aren’t feeling the idea of having a woman as president,” as he put it at a stop last week.

“I am very blunt, and I like that,” said Anita Freeman, a Las Vegas resident and high school teacher who said she attended the Saturday rally to “hear what the message is firsthand from the Democratic Party.”

She hasn’t made up her mind who she will vote for, she said, but she’s leaning toward Harris. And she has appreciated the messaging from Obama, who she voted for twice and said reminds her of her father. He’s been right to call out sexism in the race, she said.

“There are a lot of people who still hold onto old cultural beliefs that women should not have power,” said Freeman, who said that in the 1980s she was the first female firefighter in the New Jersey township where she grew up.

Michael Dakan, who traveled to Nevada from Los Angeles to canvas for Democrats, said he’s noticed how lately Obama is “less tempered about what he says.”

“But he’s still Obama, he’s still presidential, he’s measured, he’s what we hope to have in a president,” said Dakan, who was wearing a Deadhead shirt that read “Make America Grateful Again.” “When I listen to him speak, he just puts me at ease. He has a certain grace.”

The race between Harris and Trump in Nevada is among the tightest of any state in the country, according to The Washington Post’s polling average, which shows Harris clinging to a lead of less than a point.

The state is one of seven that likely will decide who winds up in the White House next year. Democrats have recently dominated here, winning the state’s electoral college votes in the last four presidential contests and in six of the last eight. But Trump appears to have gained ground as concerns over skyrocketing rents and home prices have some voters itching for a change.

Responding to this newly competitive environment, Democrats have been parading through the Silver State. Harris has ventured here multiple times recently, vice-presidential nominee Tim Walz stopped in earlier this month and former president Bill Clinton will rally voters here next week. Trump has likewise campaigned in Nevada and will return next week.

Voters here may also play a key role in determining which party controls the House. In the race for Senate, Democrats have a considerably larger advantage: Incumbent Sen. Jacky Rosen (D) is leading her Republican challenger, Sam Brown, who has struggled to gain traction and keep up in polls and fundraising.

As in several other states, abortion politics are playing a major role in Nevada. Voters will decide whether to amend the state’s constitution to ensure a right to the procedure. Democrats are hoping the issue will energize voters and spur increased turnout, benefiting them in other races.

Obama — who is set to travel to Michigan, Wisconsin and Georgia in the coming days — noted the statewide vote Saturday night. He said that while “there are good people of conscience on both sides” of the abortion debate, “we should at least agree that such a deeply personal decision should be made by the woman whose body is involved and not by politicians.”

The former president’s soaring rhetoric seemed designed to conjure up memories of his eight years in office, a time many Democrats now remember fondly as an era of ascendant political optimism.

In doing so, Obama sought to draw a direct line from himself to Harris — a link he made explicitly at the Democratic National Convention, when he said that “the torch has been passed.”

While the Harris campaign — and Obama, too, in recent appearances — has made a mantra of the phrase “We’re not going back” in reference to Trump’s time in office, they are in fact pushing a different brand of longing for the recent past.

At his Friday stop in Tucson, Obama recalled fondly his opponent in the 2008 presidential election, the late-Sen. John McCain (R-Ariz.): “He understood that some values transcend parties.”

And on Saturday, he mentioned the late Democratic senator from Nevada, Harry M. Reid, who he said “refused to see politics as just this battle between good and evil.”

The message appeared to be: Remember when times were tamer and politics somewhat more polite?

This post appeared first on washingtonpost.com

Walt Disney Co. (DIS) has struggled as a business over the past few years and isn’t on many investors’ radars these days. However, Disney seems to have turned a corner last quarter and is positioned for a resurgence in its core theme parks and streaming businesses.

With consumer spending in the travel sector remaining robust, demand for Disney’s theme parks is increasing. Additionally, Disney+ is on track to become profitable by Q4, and the inclusion of ESPN could further enhance Disney’s edge in the streaming space. These factors provide upside potential for Disney’s stock price, particularly as the company recovers from recent challenges and realigns its strategic focus.

Disney’s stock price has recently broken above its trading range, pulled back, and bounced off its $92 support level (see chart below). This suggests there is momentum to target $102 to the upside and $113 as an extended target to the upside.

FIGURE 1. DISNEY’S STOCK PRICE HAS THE POTENTIAL TO MOVE HIGHER. An improving relative performance and moving average convergence/divergence support a potential higher price move in Disney.Chart source: StockCharts.com. For educational purpose.

With the relative performance of DIS to the S&P 500 ($SPX) improving and the moving average convergence/divergence (MACD) showing signs of strengthening, this confirms the upside potential as DIS potentially breaks out above its $97.50 resistance.

Disney stock appears modestly undervalued, trading at 18x forward earnings, slightly below the industry average. Its expected earnings per share (EPS) growth of 14.5% aligns with the industry average, while its revenue growth forecast of 4% aligns with its peers. However, Disney’s net margins of 5% surpass the industry average of 3%, indicating a stronger outlook on profitability, especially with anticipated improvements from its streaming business and sustained demand in its theme parks.

Options on DIS are expensive, with the IV rank at 67%. So, to capitalize on a potential major breakout for DIS, I suggest buying a December $95/$110 call vertical for $5.09 debit.


A call vertical involves buying a call option and selling another with a higher strike price. The two options have the same expiration date.


FIGURE 2. CALL VERTICAL ANALYSIS. Here, you see the cost of the trade, the risk curve, and the risk/reward tradeoff of the call vertical for DIS. Image source: OptionsPlay.

This structure allows an offset for the relatively expensive Dec $95 call options and reduces the overall risk by selling the $110 calls. This structure entails:

  • Buying the Dec 20 $95 Call @ $6.25
  • Selling the Dec 20 $110 Call @ $1.16

 This call vertical spread allows for a maximum reward of $991 per contract if DIS is above $110 at expiration, with a maximum risk of $509 if DIS is below $95 at expiration.

In this week’s RRG video, I shared my concerns about the current market conditions. The sector rotation model and current sector rotation, as we see it on the Relative Rotation Graph for US sectors, are sending us conflicting signals. This combination continues to make me cautious about fully buying into the rally with new positions.

Being fully-invested is too risky at the moment (for me).

My current approach is that the risk of being fully invested in the market right now, or even buying into it, is too high for my comfort. Instead, I suggest we focus on identifying individual stocks or industries that present profit opportunities for long positions.

Dow Jones Industrials: Finding the Right Stocks

I haven’t blogged about individual stocks for a while, especially not about the members of the Dow Jones Industrials. Thus, I thought it would be beneficial to examine the constituents of the Dow Jones Industrials Index to find suitable candidates for long positions.

Outliers on the RRG

When you look at the RRG holding the Dow Jones Industrial Stocks, two real outliers catch the eye. The first is Intel (INTC), which is in the lagging quadrant and experiencing a significant hiccup in relative momentum. The second outlier is 3M (MMM), located in the weakening quadrant and rapidly losing relative momentum. If removed from the equation, these two stocks allow us to see a more balanced distribution of stocks across the various quadrants.

Positive RRG Headings

My next step is to toggle over all the individual stocks and highlight those with a positive RRG heading between 0 and 90 degrees. This indicates that a stock is gaining relative strength against the Dow Jones Industrials and is supported by positive momentum.

With this filter, we see two stocks in the lagging quadrant on a positive heading: Amazon and Honeywell. Four stocks are inside the improving quadrant, and they seem to be continuing their improvement: DIS, NKE, CRM, and V.

Concentrating on the Leading Quadrant

The leading quadrant has a higher concentration of stocks on a positive heading, and that’s where I want to focus our attention. After reviewing the individual charts of these stocks, I’ve identified a few worth a closer look and might be considered for adding to a portfolio.

The Strong Performers: TRV, WMT, and AXP

Travelers (TRV), Walmart (WMT), and American Express (AXP) are showing very strong charts in terms of price and relative strength. However, they’ve had such a long run that I wouldn’t recommend chasing them higher. The same goes for American Express (AXP). If you already hold these stocks, they are a great “hold,” but I wouldn’t initiate new positions.

The Top Three Picks

Now, let’s talk about the three stocks that stand out as potential additions to our portfolio.

Caterpillar (CAT)

Caterpillar’s price has just broken above the previous high at $380 and is consolidating. As long as it stays above $380, it has a good chance of continuing its uptrend. The RRG lines have turned up and are both above 100, indicating a positive RRG heading.

Cisco (CSCO)

Cisco bottomed out around $44 and has climbed to its previous high of around $56. It’s now breaking above that resistance, which is a positive sign.

The next target is the late December 2021 peak, just below $60. The relative strength is picking up again, confirmed by both RRG lines pushing above the 100 level. Once that barrier is taken out, a lot of upside potential for CSCO will be unlocked.

Home Depot (HD)

Home Depot has broken above resistance around $390, formed by two peaks in late 2021 and March 2024. The stock confirms a new uptrend with the RRG lines pushing above 100. We could see significant upside potential when the raw RS line surpasses its previous high from March 2024.

By measuring the height of the range from $260 to $390, we can project a rough price target of $520 for Home Depot to be reached within the next two years, as long as the support around $390 holds.

Remember, it’s not about chasing the market; it’s about making informed decisions based on solid analysis.

#StayAlert and have a great weekend, –Julius


Despite a light economic data week, the stock market continued its rally, with the S&P 500 ($SPX) and the Dow Jones Industrial Average ($INDU) closing at record highs. How many times have we heard that? This is the sixth positive week for the three indexes.

Strong earnings from big banks, Taiwan Semiconductor Mfg. (TSM), United Airlines Holdings (UAL), and Netflix, Inc. (NFLX) injected optimistic energy into the stock market.

Tech Stocks Hold Steady

The tech-heavy Nasdaq Composite ($COMPQ) may not have hit all-time highs, but its daily chart is worth a closer look. An ascending triangle formation has reached its apex, indicating indecision among investors. The breadth indicators in the lower panels below the price chart echo this indecision.

CHART 1. NASDAQ COMPOSITE CONVERGING AT TRIANGLE APEX. The Nasdaq Composite seems to be at a point of indecision. This could continue until Tech stocks report quarterly earnings.Chart source: StockCharts.com. For educational purposes.

The Nasdaq Bullish Percent Index (BPI) is trending higher but is registering at 57.76, which is slightly bullish. The percentage of Nasdaq stocks trading above their 200-day moving average is also lukewarm, and the Nasdaq advance-decline line isn’t showing strong bullish participation.

Investors are probably waiting for Tech earnings. Until then, the index will probably stay put unless some unknown market-moving event occurs before then. The indecision in Tech stocks isn’t stopping investors from shifting to other areas of the market.

Mid-Caps Might Flatten

The S&P 400 Mid Cap Index ($MID) broke out of its trading range in September and has been trading above it since then. The index hit an all-time high this week, but has started to show signs of flattening (see last two bars in chart below).

CHART 2. MID-CAP STOCKS BREAK OUT OF RANGE. After hitting an all-time high, the S&P 400 Mid-Cap Index is stalling.Chart source: StockCharts.com. For educational purposes.

The percentage of $MID stocks above their 200-day moving average is 73, which is pretty healthy. The advances still need higher volume to push the index higher. Until that happens, the mid-cap asset class may stall.

Bitcoin Breaks Out, Gold Glitters

Bitcoin has also shown its might this week. The weekly chart shows Bitcoin breaking out of a flag pattern (see below).

CHART 3. BITCOIN BREAKS OUT OF A CONSOLIDATION PATTERN. A breakout plus a possible MACD crossover could send Bitcoin prices higher. Note that the crossover is close to the zero line, an encouraging sign.Chart source: StockCharts.com. For educational purposes.

After hitting the measured move targets following the previous consolidation, $BTCUSD has been in an extended consolidation pattern and has finally broken out. A bullish crossover in the moving average convergence/divergence (MACD) could occur. The crossover is close to the zero line, a criterion I look for. Look at what happened to the price of Bitcoin the last time a crossover took place at the zero line! Bitcoin could move higher by about 42.5%.

Speaking of all-time highs, gold prices are on fire. The SPDR Gold Shares ETF (GLD) has been in an uptrend since early March, and central bank interest rate cuts have propelled gold prices higher (see chart below).

CHART 4. GOLD PRICES ON A TEAR THIS YEAR. GLD has been following a typical uptrend, going through consolidations, breaking out of them, and continuing its ride higher.Chart source: StockCharts.com. For educational purposes.

GLD could potentially rise above $250, but it’s difficult to set an entry point unless there’s a pullback. If you are considering going long now, apply stringent stop losses.

The Atlanta Fed GDPNow is estimating a 3.4% growth in Q3 2024. This has led investors to think the Fed will not cut interest rates in its November meeting. However, the CME FedWatch Tool shows a 92.9% probability of a 25 basis point cut. So, if there’s a rate cut in November, GLD could rise higher. This can change though, considering we’re less than three weeks away from the meeting, which happens to be right after the U.S. presidential election.

Looking Forward

Next week is thin on economic data, but earnings season continues. It’s not a strong week for Tech earnings, so the Nasdaq could continue its indecisive price action. As for the rest of the market, there could be more of the same. As always, anything could happen over the weekend that could send things awry.

End-of-Week Wrap-Up

  • S&P 500 closed up 0.85% for the week, at 5864.67, Dow Jones Industrial Average up 0.96% for the week at 43,275.91; Nasdaq Composite closed up 0.80% for the week at 18,489.55
  • $VIX down 11.88% for the week, closing at 18.03
  • Best performing sector for the week: Utilities
  • Worst performing sector for the week: Energy
  • Top 5 Large Cap SCTR stocks: Insmed Inc. (INSM); Carvana (CVNA); Ubiquiti, Inc. (UI); Applovin Corp (APP); Cava Group, Inc. (CAVA)

On the Radar Next Week

  • Fed speeches
  • September Existing Home Sales
  • September New Home Sales
  • Earnings from Tesla (TSLA), General Motors (GM), Verizon Communications (VZ), Coca Cola (KO), among others

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 Moving Average Convergence/Divergence (MACD) indicator, created by technical analyst Gerald Appel, is a technical indicator designed to confirm once a trend change has occurred. Based on exponential moving averages, it is not built to anticipate a price reversal, but rather to identify that one has already occurred.

The lesser-known MACD histogram can actually provide a powerful leading indicator as to when a turning point could be just around the corner. Today, we’ll use the weekly chart of IBM to show how, by combining these two techniques, we can anticipate potential reversals and then confirm when and how the trend has shifted.

Using the MACD or PPO Indicator to Define the Trend

To start this discussion, let’s be clear on why we’re using the PPO indicator instead of MACD on our example charts. The MACD indicator is based on the price difference between two exponential moving averages, while the PPO indicator is based on the percent difference between those two averages.

For a short-term time frame, the indicators are almost identical and either one can be used for effective signals. For long-term time frames, however, using percentage terms instead of price terms allows for a more consistent comparison, especially if the stock or ETF has experienced big price swings.

On the weekly chart of International Business Machines (IBM), the PPO indicator (bottom panel) starts with the PPO line, which represents the difference between the 12- and 26-week exponential moving averages. Then we have the red signal line, which is simply a 9-bar moving average of the PPO line.

Note the sell signal in late March 2024, when the PPO line crossed down through the red signal line. Conversely, the buy signal in mid-July is based on the PPO line crossing back up through the red signal line. At the present time, the PPO indicator suggests the uptrend is alive and well, with the PPO line sloping higher above the red signal line.

Adding the Histogram Helps to Anticipate the Signals

See how the sell signal in March came after the peak had occurred, and the price was already in a new downtrend?Also, notice how the buy signal in July appeared well after the actual price low in April?

This is actually by design, as the PPO indicator is considered a lagging indicator. It’s not designed to tell you a reversal may be coming soon, but rather that a reversal recently happened and is now being confirmed. But what if we want to anticipate those reversals before they occur?

The PPO histogram, shown behind the PPO indicator in blue, represents the difference between the PPO line and the signal line. Go back to that March peak, and you may notice that the histogram had started to slope downward starting in February. Then, in May, right as the price was finding a new swing low, the histogram started to slope back upwards.

So, to summarize the components, the histogram reversals raise the “red flag” that a potential price reversal is coming, and then the actual PPO crossover confirms that the trend reversal has actually occurred. Now we can use the PPO indicator as both a leading and a lagging indicator!

Using the Histogram With Other Indicators

Fast forward to October 2024, and you’ll see that this week the PPO histogram moved slightly lower. This could represent the early warning of an impending top for IBM. For this situation, I like to go to a lower time frame, in this case the daily chart, and use trend-following techniques to confirm a breakdown on the shorter time frame. While the weekly may still be my main indication, a sell signal could come earlier on the daily chart and help me to take action before the pain gets too unbearable!

Here I’m showing the Chandelier Exit system, which is a trailing stop indicator based on Average True Range (ATR). As long as IBM remains above the Chandelier Exit, the uptrend is most likely still alive and well on the daily chart.  A breakdown of this trailing stop could help me confirm the bearish divergence we’ve noted on the weekly PPO chart.

The technical analysis toolkit consists mainly of leading indicators and lagging indicators. While I primarily use lagging indicators to follow the trends and confirm trend reversals, I have also found leading indicators such as the PPO histogram to be a vital part of managing risk and identifying opportunities for my portfolio.

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 this StockCharts TV video, Mary Ellen reviews what’s driving the markets higher and how you can capitalize. Moves in TSLA, NVDA, and NFLX are highlighted. She also reviews price action greatly impacted by earnings, many driven by analyst upgrades and downgrades.

This video originally premiered October 18, 2024. You can watch it on our dedicated page for Mary Ellen on StockCharts TV.

New videos from Mary Ellen premiere weekly on Fridays. You can view all previously recorded episodes at this link.

If you’re looking for stocks to invest in, be sure to check out the MEM Edge Report! This report gives you detailed information on the top sectors, industries and stocks so you can make informed investment decisions.

South Korean intelligence has found that North Korea has dispatched 12,000 troops including special operation forces to support Russia’s war against Ukraine, news reports said Friday, a development that could bring a third country into the war and intensify a standoff between North Korea and the West.

Yonhap news agency cited the National Intelligence Service as saying that the North have already left the country, formed into four brigades. Other South Korean media outlets carried similar reports.

If confirmed, it would be North Korea’s first major participation in a foreign war. North Korea has 1.2 million troops, one of the largest militaries in the world, but it lacks actual combat experience.

Many experts question how much the North Korean troop dispatch would help Russia, citing North Korea’s outdated equipment and shortage of battle experiences.

During a meeting in Pyongyang in June, North Korean leader Kim Jong Un and Russian President Vladimir Putin signed a pact stipulating mutual military assistance if either country is attacked, in what was considered the two countries’ biggest defense deal since the end of the Cold War.

The NIS didn’t immediately confirm the report, but South Korea’s presidential office said in a statement that President Yoon Suk Yeol had presided over an emergency meeting earlier Friday to discuss North Korea’s troop dispatch to Ukraine.

The statement said participants of the meeting agreed that North Korea’s troop dispatch poses a grave security threat to South Korea and the international community.

But the presidential office gave no further details like when and how many North Korean soldiers have been sent to Ukraine and what roles they are expected to play.

Russia has denied using North Korean troops in the war, with Presidential Spokesman Dmitry Peskov describing the claims as “another piece of fake news” during a news conference last week, according to Russia media.

Ukrainian media reported earlier this month that six North Koreans were among those killed after a Ukrainian missile strike in the partially occupied eastern Donetsk region on Oct. 3.

On Thursday, Ukrainian President Volodymyr Zelenskyy said his government has intelligence that 10,000 troops from North Korea are being prepared to join Russian forces fighting against his country, warning that a third nation wading into the hostilities could turn the conflict into a “world war.”

“From our intelligence we’ve got information that North Korea sent tactical personnel and officers to Ukraine,” Zelenskyy told reporters at NATO headquarters. “They are preparing on their land 10,000 soldiers, but they didn’t move them already to Ukraine or to Russia.”

NATO Secretary-General Mark Rutte said the western alliance “have no evidence that North Korean soldiers are involved in the fight. But we do know that North Korea is supporting Russia in many ways, weapons supplies, technological supplies, innovation, to support them in the war effort. And that is highly worrying.”

The US, South Korea and their partners have accused North Korea of supplying Russia with artillery shells, missiles and other equipment to help fuel its war on Ukraine.

Outside officials and experts say North Korea in exchange possibly received badly needed food and economic aid and technology assistance aimed at upgrading Kim’s nuclear-armed military.

Both Moscow and Pyongyang have repeatedly denied the existence of an arms deal between the countries.

This post appeared first on cnn.com