More Data Comes in Showing the Golden Path

Dips will get bought up as FOMO starts to take over

Recap

✅ We are now (as of Dec 13) at Majority Bullish 50%+ for AAII sentiment; however, I think it can actually go higher for Dec (then Jan 2024 comes caution).

Although previously the market would show weakness at 50%+, this time might be different and we continue further into Extreme Greed

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New 52-Week Highs vs New 52-Week Lows

• NYSE New 52-Week Highs: 378 vs New 52-Week Lows: 10

• Nasdaq New 52-Week Highs: 484 vs New 52-Week Lows: 84

• Will you look at that, 862 New 52-Week Highs, now you see why I forecasted that FOMO is coming. 😁

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Today

Atlanta Fed GDPNow tracker updates to 2.6% GDP growth—and economic growth while inflation is falling = Golden Path.

The Fed has said we likely need below-trend growth to get inflation down to target. Higher growth could challenge the current rate cut expectations—so it needs to be Goldilocks and close to ~2%. If GDP growth shoots up to 3%+ then the market can start worrying about future rate cut expectations.

Golden Path: solid retail sales and jobless claims data today

Agree with Diane and lines up with Golden Path outcome…which is economic growth WHILE inflation recedes

Golden Path (real wages are rising = more real spending while supply improves and prices moderate)

Amazing: global financial markets knew US equities was the place to be months ago and why the US stock market has just outperformed globally.

And yes, this is Golden Path =)

Golden Path: jobs are healthy and people are able to find stable employment = income and companies earnings continue to grow.

Majority of CPI was shelter/rent inflation and real-time data is saying inflation in that area is over. We also have a lot of housing supply coming online—again, the homebuilders like Toll Brothers, Pulte Group, etc. are at ALL TIME HIGHS.

Golden Path: Retail sales beat expectations—the US consumer is healthier than expected = economic growth continues.

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Forecast

We are over-extended on GEX as I pointed out yesterday and Daily RSI on SPY 0.00%↑ is overbought close to 80—but like I called would happen, overbought is going to get even more overbought.