Daily market review June 27, 2024 (market coiling for the next directional move, when is the market best entry point and why US stock market returns are far higher than the rest of the stock market)
Broad market overview
Market is trading at extremely tight range waiting for the next move., today PCE will likely decide the next directional move. It’s days like this that remind us that market always has that 3rd option besides moving up or moving down, which is consolidating, moving in tight range without doing anything.
But if you’re the paid subscribers, then you would know where is the market heading next.
S&P 500 11 sectors overview
Real estates , Communications and Discretionary are the best performing sectors. Look at the long bullish bar from Discretionary, it is quite a sight to behold.
MOVE index
MOVE is coiling tightly, pending to breakout for the next directional move
Move index is currently at 95.69, ( bond price implied volatility is expected to be around 9.57% per annum. ) Lower MOVE points to (implied) lower bond market volatility going forward.
Bond volatility moving lower translates into less haircut to bond, in which more liquidity can be extracted from the collateral pool.
NYSE & Nasdaq market internals
More Advancers relative to Decliners.
Generally after Memorial day holiday, volume will decline gradually heading into the summer season.
On June 27 2024,
1.52 to 1 NYSE Decliner to Advancer ratio (1698/1113 )
1.7 to 1 Nasdaq Decliner to Advancer ratio (2659/1564 )
% of stock above 20Day, 50Day, 200Day
Breadth has declined compared to a few days ago while SPX is stabilizing/coiling for the next directional move,
% of SPX stock above 20D MA : 50%
% of SPX stock above 50Day MA : 50.4%
% of SPX stock above 200Day MA : 68.4%
Why US stock market returns are far higher than the rest of the world ?
A simple look at the ratio charts of SPY vs ACWI ETF ( world equities ex-USA ) , QQQ vs ACWI, show the big gap between them.
SPY outperform ACWI by 27.4 since 2023, by 50.5% since 2020.
QQQ outperform ACWI by 37.8% since 2023, by 52% since 2020
But does it have any merit ? is there any substance and is US stock market really more expensive than the rest of the world ?
Based on this chart, US export the most digital products ( software, AI products ) relative to the rest of the world ( high earnings with fat margin )
And Nasdaq share price growth is backed by earnings, unlike the 2000’s dot com bubble.
When is Best Time to enter the market ?
Paid subscribers will get my thoughts on the latest update in the market as the situation/development unfolds.
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We have to rely on the several tools to answer the question of Best level and Best time , which give us a clear lenses to triangulate time and level element in the current market. this allow us to establish the best entry point to enter the market.
Just to reemphasize the following section again, in case you miss out,