The next new position in our Paid-to-Play portfolio is:

This is that time again where we try to see through the fog of short-term moves and identify the long-term structure of the market. Every month, this process helps have a clear vision going into the new month. So let's dive in and look at some of these charts!

Risk assets sold off following the latest move by the Federal Open Market Committee to hike interest rates by 75 basis points.

As always, we prioritize how markets price in these events and, ultimately, how they react to the actual print.

That's because the market is a forward-looking discount mechanism; price action reveals a collective expectation of events before they take place.

Rather than focusing on the minutiae of the CPI and/or the workings of the FOMC, we prioritize money flow.

The largest insider transaction on today's list is a Form 4 filing by the chairman and CEO of American Assets Trust $AAT, Ernest Rady.

Rady reported the purchase of $1.3 million.

From the Desk of Kimmy Sokoloff

It's anybody's guess where we go from here.

I think Mr. Market was looking for a glimmer of light from our Fed Chair, and that did not happen.

From the Desk of Steve Strazza @Sstrazza

When investing in the stock market, we always want to approach it as "a market of stocks."

Regardless of the environment, there are always stocks showing leadership and trending higher.

We may have to look harder to identify them depending on current market conditions. But there are always stocks that are going up.

The same can be said for weak stocks. Regardless of the environment, there are always stocks that are going down, too. 

We already have multiple scans focusing on stocks making all-time highs, such as Hall of Famers, Minor Leaguers, and the 2 to 100 Club.

We filter these universes for stocks that are exhibiting the best momentum and relative strength characteristics. 

Clearly, we spend a lot of time identifying and writing about leading stocks every week, via multiple reports.

Now, we're also highlighting lagging stocks on a recurring basis.

Welcome to the Short Report.

We...

From the Desk of Ian Culley @IanCulley

The US dollar has stopped going up!

In fact, it’s already registered a slightly lower high and lower low this past month. 

But we can’t call a top in the US dollar yet. While it came close to officially triggering a top last week, the lack of follow-through kept us in our seats.

With fresh monthly candles in the books, let’s review longer-term charts and reiterate key levels for ol’ King Dollar.

From the Desk of Kimmy Sokoloff

That was a roller-coaster ride, and a wild one.

After the FOMC meeting the markets took a dive, just like last meeting.

We had a resting GTC order filled at our profit target in the Paid-to-Play portfolio today:

We had a resting GTC order filled at our profit target in the Paid-to-Play portfolio today:

From the desk of Willie Delwiche.

With fear subsiding but strength slow to emerge, downside tactical risks are rising. We reduced the equity exposure in our Tactical Opportunity portfolio and have moved more cash to the sideline.

From the desk of Willie Delwiche.

Households Stick With Stocks

Household equity exposure is ten percentage points below its November 2021 peak. Even with that decline, it is only now approaching its long-term average. Bond exposure remains below its long-term average and cash exposure in October moved above its long-term average for the first time since COVID. 

Why It Matters: Moods are sour, but for all the talk of rampant pessimism & historic levels of bearishness, individual investors have not abandoned stocks. This is as evident in the AAII asset allocation survey as it is in the latest ETF flow data. For the amount of pessimism that is being seen elsewhere, there is relatively little cash on the sidelines. If there is an underowned and unloved asset class it is either bonds or commodities, not stocks.  

In this week’s Sentiment Report we take a closer look at how investors are feeling and how that squares with what they are doing.