Weekend Analysis--Golden Path Cannot be Underestimated
Powell: "Inflation has eased substantially while the labor market has remained strong, and that is very good news."
Effective today: all active subs received 1 year free extensions—if you did not receive it, please let me know! Once I am finish moving into my new apartment in Singapore, I’ll be posting more frequently starting in April (after taxes).
Recap
❌ SPX 5000 was not in the cards—the market is that bullish. More on this below re: the FOMC meeting.
✅ For the past few months, I have been constantly sharing with readers do not underestimate the Golden Path—even I am underestimating it by thinking SPX can retrace to 5000! We are on our way towards 5400—long-time readers know that for the target forecasts I share they have been quite accurate. During the bear markets I accurately called reversals/bottoms and now for this Golden Path bull market, I am unable to call tops because this market has been that bullish. However, as the flows shift, I update my forecasts and follow the data.
Honestly, this was the most simple explanation from my post last week. While the bears and macro contrarians on Twitter scream “inflation resurging, we are in trouble!”—my read into CPI below clearly saw the forest from the trees:
New 52-Week Highs vs New 52-Week Lows
NYSE New 52-Week Highs: 234 vs New 52-Week Lows: 20
New Highs of interest: Autozone, Bank of America, Bank of New York Mellon Corp., BlackRock Capital Allocation Term Trust, Charles Schwab Corp., Citigroup, Deutsche Bank AG, Discover Financial Services, FedEx Corp., General Electric Co., General Motors Co., Goldman Sachs Group Inc., JP Morgan Chase, Keycorp, Lowes, Shake Shack Inc., Walt Disney Co.
I’m in Singapore and there is housing construction everywhere. I do not think inflation is going to be a problem with birth rates falling below 2.0 in most countries and so much housing supply coming online this year and next few years. Also, restaurants, businesses, metro stations, shopping areas, tourists area, etc. are bustling in Singapore to Vegas (where I lived)—although anecdotal information, it’s lining up with all the economic data saying jobs are plenty and the economy continues to grow (especially the US economy).
There are many new highs but all these companies—especially the banks—tell me the market is going to go even higher towards my SPX 5400 target.
Notice Financials ETF XLF 0.00%↑ and the rotation to many banks (which I forecasted we would be seeing bullish market rotation)—XLF is at a weekly RSI overbought reading of 82.40!
Nasdaq New 52-Week Highs: 136 vs New 52-Week Lows: 95
New Highs are now higher than New Lows.
McClellan Oscillator
New Highs - New Lows
*This my personal blog and is not investment advice—I am not a financial advisor but a random person on the internet who does not have a license in finance or securities. This is my personal Substack which consists of opinions and/or general information. I may or may not have positions in any of the stocks mentioned. Don’t listen to anyone online without evaluating and understanding the risks involved and understand that you are responsible for making your own investment decisions.
Past Week
House starts & permits coming in above = Golden Path
This datapoint just confirms more Golden Path
This is from Chare Bilello’s email distribution and this tells me they are chasing the Golden Path ever higher.
As I shared, do not underestimate the Golden Path and the Age of AI—as the CEO of Nvidia shared at the GTC conference, we are in a new Industrial Age of AI.
FOMC key points
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