Weekly Chart Review

Monthly Chart Deck

Before we get into this week’s newsletter, a quick public service announcement:

One of the great benefits we have in this country is the right to vote. If you have not voted, I would strongly encourage you to exercise this right tomorrow.

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A new month brings new monthly price levels to monitor, and thus our “Monthly Chart Deck” of more than 30 charts.

A couple of quick observations regarding this month’s charts:

• Most of the equities we track have moved to “Bearish” on the short-term (i.e., daily) charts but have not reached “oversold” conditions on the RSI panel thus suggesting they could have further to fall in the short-term.

• US Treasury yields have risen of late but many are currently at “overbought” levels on the RSI panel thus suggesting they may pause here, especially if coupled with monthly and/or quarterly resistance levels.

Lastly, this week will have its fair share of volatility-increasing events: a major US election, FOMC rate decision, earnings, etc.

With that said, I will restate what I said in last week’s newsletter:

• Unless one party wins so convincingly that there’s no debating it, the other party will not be convinced of the outcome.

  • Therefore, the results of the election will likely be contested either formally (i.e. in the court system) or less formally (i.e., in the streets) or both.

A highly contested election with 50% of the nation already very upset about the loss (I can hear the cries now “It was stolen…”) will lead to uncertainty for the markets.

Markets typically do not like uncertainty. If we have only three options: buy, sell, or do nothing; my experience suggests that in moments of high uncertainty, people tend to skew towards doing nothing or selling.

Net/net, uncertainty tends to lead to a sideways or lower market.

Monthly Chart Deck

To read more about the methodology and thesis behind these charts, please go here.

If there are additional charts that you would like to see next month, please do not hesitate to reply to this email or by leaving a comment.

With that out of the way, let’s dive into the charts, our “Asset Class Review”, and our S&P 500 fair value model. Enjoy!