Alexander Spatari/Moment via Getty Images
Special Note: This post is the right next part of my article, titled “If January was Positive, Is So In 2024? It Depends Upon 3 Remaining Days.”, Jan 29, 2024.
The Daily Vigorous Movements of S&P 500 From Dec 29, 2023 to Jan 17, 2024
Table 1 serves tracing the previous article, titled “If January was Positive, Is So In 2024? It Depends Upon 3 Remaining Days.”
The daily change of the S&P 500 index (or its SPDR ETF, SPY) was in the negative columns in Jan 2, 3, and 4 in a row. If we add another negative one on Dec 29, 2023, it was a 4 consecutive negatives.
First, hot grapples had been for two weeks until Jan 17, revealing the hand-to-hand battles, as the ups-and-down % changes from Dec 29: -0.56% (Jan 2, a high), -1.35% (Jan 3, a bottom), -1.69% (Jan 4, a Bottom), -1.51% (Jan 5, a bottom), -0.12% (Jan 8, a High), -0.23% (Jan 9, a high), -1.35% (Jan 10. a bottom), -1.69% (Jan 11, a Bottom), +0.30% (Jan 12, a Plus), -0.07% (Jan 16, a High), and +0.42% (Jan 17, a plus).
Second, S&P 500 clinched a bottom both on Jan 4 and Jan 11, making between them a smooth symmetrical movement from (Jan 4) upward through high points (Jan 8 & 9) then downward coming back to another bottom (Jan 11). And then on the next day (Jan 12) spiked up a big plus (+0.30%), a High (-0.07%), and turned up to +0.42% on Jan 17.
As a result, a look of one-sided-bearish movement was overstated.
|
Table 1 Feb (2): M & T |
||||
|
Dec (29, 2023), Jan (2 – 26), Feb (1 – 2, 2024) |
||||
|
12/29/23 |
4,769.33 |
* |
* |
* |
|
01/02/24 |
4,742.83 |
-0.56% |
m |
-0.56% |
|
01/03/24 |
4,704.81 |
-0.80% |
m |
-1.35% |
|
01/04/24 |
4,688.68 |
-0.34% |
m |
-1.69% |
|
01/05/24 |
4,697.24 |
0.18% |
P |
-1.51% |
|
01/08/24 |
4,763.54 |
1.41% |
P |
-0.12% |
|
01/09/24 |
4,758.50 |
-0.11% |
m |
-0.23% |
|
01/10/24 |
4,704.81 |
-1.13% |
m |
-1.35% |
|
01/11/24 |
4,688.68 |
-0.34% |
m |
-1.69% |
|
01/12/24 |
4,783.83 |
2.03% |
P |
0.30% |
|
01/16/24 |
4,765.98 |
-0.37% |
m |
-0.07% |
|
01/17/24 |
4,789.21 |
0.49% |
P |
0.42% |
|
01/18/24 |
4,780.94 |
-0.17% |
m |
0.24% |
|
01/19/24 |
4,839.81 |
1.23% |
P |
1.48% |
|
01/22/24 |
4,850.45 |
0.22% |
P |
1.70% |
|
01/23/24 |
4,864.60 |
0.29% |
P |
2.00% |
|
01/24/24 |
4,868.55 |
0.08% |
P |
2.08% |
|
01/25/24 |
4,894.16 |
0.53% |
P |
2.62% |
|
01/26/24 |
4,890.97 |
-0.07% |
m |
2.55% |
|
01/29/24 |
4,927.93 |
0.76% |
P |
3.33% |
|
01/30/24 |
4,924.97 |
-0.06% |
m |
3.26% |
|
01/31/24 |
4,845.65 |
-1.61% |
m |
1.60% |
|
02/01/24 |
4,906.19 |
1.25% |
P |
2.87% |
|
02/02/24 |
4,958.61 |
1.07% |
P |
3.97% |
|
NOTE |
||||
|
1. M & T is Momentums & Trends |
||||
|
2. Data Source: Yahoo Finance |
||||
|
3.P/m: Plus/minus |
||||
|
4. %CH: The Percent Change. |
||||
|
5. Author made Table. |
||||
The Steady and Strong S&P 500 Movement Between Jan 18 to Jan 26
S&P 500 rose +0.24% on Jan 18, and continued to surge +1.48% and +1.70% on Jan 19 and Jan 20, respectively. On Jan 23, Jan 24, Jan 25, Jan 26 it advanced +2.00%, +2.09%, +2.62%, 2.55%, respectively.
The Consistent and Powerful S&P 500 Advance on Jan 29, Jan 30, Jan 31, Feb 1, and Feb 2
S&P 500 pulled up a whopping +3.33%, +3.26% (actually down a bit) on Jan 29 [M] and Jan 30 [T], respectively, and + 1.6% (down 1.66%) on Jan 31 [W], but still gaining.
As a consequence, the article (introduced above) fulfilled nicely. It was Wednesday (Jan 31, the last day) afternoon. I was searching for another article title. The headline title was bone, by bravely making rare price forecast: I expect S&P 500 will ascend both on Feb1 (Thursday) and Today (Feb 2, Friday).
What Can We Expect in 2024 When January Was Positive and Also Feb 1 And Feb 2 Were Positive?
We vividly remember that in February last year, bears did really aggressively attack bulls: The 5-months old Uptrend was toppled in Dec 2022, in Jan 2023 it was barely reinstated, but in Feb it was almost overturned again. This year, however, we already have 2 plus readings on Feb 1 and Feb 2, as I wished.
Now I want to see a positive spillover effect of the Santa Claus Rally, the January Effect, and the first two-days-plus columns into the February treacherous space. I hope February will be bullish, and then March will be strong as last year.
Furthermore, a bullish half year in Jun, and the bullish 2024, a joyful Goldilocks with a low economic growth, a low inflation, and a low interest rate.
More lucrative instant (a few seconds or a few sessions) trading and more profit gains on the security holdings or POWs (Prisoners of War).
Treasury Normal Yield Curve
Bond yields and security prices are observed directly from the financial markets, and probably reflect fairly all wisdoms of market participants. This is the main factor that can distinguish these market data from most other economic indicators that are compiled by government agents or private institutions.
The yield curve, which is a chart plotted eleven yields, covering the entire spectrum of maturities on U.S. Treasury securities (1-, 3-, 6-month bill, 1-year bill, 2-, 3-, 5-, 7-year note,10-year note/bond, 20-year bond, and 30-year bond.)
They start on the left with the shortest maturities and then progress to all way up to 30 years bond at the right side.
Four patterns of curves – normal, stiff, flat, and inverted
In a normal time, investors demand a higher “term premium” on a longer-term Treasury. The term premium is the excess yield needed to compensate for the risk of buying one longer term bond rather than a number of shorter-term bonds. Therefore, a normal curve rises as the duration lengthens.
A stiff curve is an extreme shape to rise the yield more rapidly, anticipating higher inflation or a selloff of higher-term bonds by investors or central banks.
A flat curve shows a relatively even yield on the various durations. This normally warns of a problem in economy in the near future.
Finally, an inverted curve that is a shorter-term bond has higher yield than a loner-term one. It indicates an imminent danger into a recession or a spike of inflation.
On Feb. 2, 2024 (Friday) the yield curve was normal. The 30-year yield was 4.22% and the 10-year yield was 4.02%.
The Inverted TYC (Treasury Yield Curve)
The top-down approach (which is the core concept of the instant trading and a dual portfolio investing) starts from the TYC which has two sides:
One side is a positive side (in terms of term premiums, profits, or earnings), indicating global economic growth.
The other is a negative side (in terms of time discounts, losses, or costs), indicating global inflation and interest rates.
There are three players who can influence the TYC:
(1) Global central banks led by the Federal Reserve, (2) the global bond investors, and (3) the Open Market Desk (“OMD”) of the New York Fed.
Actions of central banks (i.e., interest-rate changes, and purchases or sales of government bonds) affect the TYC transitorily and discretely.
Expectations of bond investors about economic growth and rates make the shape of the TYC consistently and gradually.
The OMD, closely cooperating with the Treasury Department, determines the final shape of the TYC, such as the stiffness or flattener, routinely and optimally by selling and buying different durations of Treasuries online 7/24/365.
|
Table 2 Treasury Yields (Feb 2, 2024) |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
DATE |
2 YR |
5 YR |
10 YR |
20 YR |
30 YR |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
01/02/24 |
4.33% |
3.92% |
3.94% |
4.29% |
4.08% |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
01/03/24 |
4.34% |
3.91% |
3.93% |
4.23% |
4.07% |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
01/04/24 |
4.38% |
3.99% |
4.00% |
4.31% |
4.15% |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
01/05/24 |
4.40% |
4.02% |
4.05% |
4.36% |
4.20% |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
01/08/24 |
4.38% |
3.99% |
4.03% |
4.34% |
4.19% |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
01/09/24 |
4.37% |
3.97% |
4.02% |
4.33% |
4.19% |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
01/10/24 |
4.36% |
3.98% |
4.03% |
4.25% |
4.20% |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
01/11/24 |
4.26% |
3.88% |
3.97% |
4.31% |
4.17% |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
01/12/24 |
4.14% |
3.83% |
3.94% |
4.24% |
4.18% |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
01/16/24 |
4.22% |
3.94% |
4.07% |
4.41% |
4.30% |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
01/17/24 |
4.37% |
4.43% |
4.11% |
4.45% |
4.32% |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
01/18/24 |
4.36% |
4.06% |
4.15% |
4.49% |
4.37% |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
01/19/24 |
4.38% |
4.40% |
4.13% |
4.46% |
4.33% |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
01/22/24 |
4.38% |
4.03% |
4.11% |
4.45% |
4.32% |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
01/23/24 |
4.38% |
4.05% |
4.14% |
4.48% |
4.37% |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
01/24/24 |
4.39% |
4.09% |
4.19% |
4.54% |
4.42% |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
01/25/24 |
4.28% |
3.98% |
4.10% |
4.46% |
4.35% |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
01/26/24 |
4.34% |
4.03% |
4.14% |
4.49% |
4.37% |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
01/29/24 |
4.33% |
3.99% |
4.08% |
4.43% |
4.32% |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
01/30/24 |
4.34% |
3.97% |
4.04% |
4.37% |
4.26% |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
01/31/24 |
4.25% |
3.88% |
3.95% |
4.30% |
4.30% |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
02/01/24 |
4.23% |
3.81% |
3.88% |
4.22% |
4.12% |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
02/02/24 |
4.37% |
3.99% |
4.02% |
4.33% |
4.22% |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
NOTE |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Data Source: Treasury Department |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Table 3 (which was made by author) helps readers easily grasp the change in the shape of the TYC from Jan 2 to Feb 2, 2024.
The table exhibits the highest level around 0.4% (positive sign) on Jan 2 and Jan 3, keeps the 0.3% level until Jan 10, drawing down, ranging from 0.29% to 0.16% (the bottom on Jan 16) until Jan 29, and finally up again a bit in the end, printing 0.30% on Jan 31, 0.35% on Feb 1, and 0.34% on Feb 2.
In other words, the recent inverted feature of the TYC was 1) topping on the beginning of the year, 2) reducing the level continuously until the end of Jan, and 3) pushing up in the early Feb.
Albeit the inverted TYC has some track records to indicate loosely a possible “recession” with a wide margin, but a precise pinpoint of starting a R, such as in what month and on what date, is not valid. Please be aware of the pitfalls of such a case of the prediction of it towards R.
The Economy and Market in 2024 and Beyond
The S&P 500 index (SPX) and Dow Jones Industrial Average® (DJI) clinched their fresh all-time high closes Friday after stronger-than-expected earnings from several tech mega-cap leaders. The Tech-weighted Nasdaq Composite® (COMP.IND) also reached its highest level in over two years.
The economy, represented by S&P 500, and the market, backed by a Goldilocks climate, created by the resiliency of the economy, the still accommodating liquidity inherited from the GFC (Global Financial Crisis) and the Covid-19 Pandemic, and the flawless execution of the Fed Policy.
The Bull Plateau will continue until 2026 or 2027, according to various market indicators and the profitable results of the instant trading and the gains of the security holdings in two brokerage accounts.
As documented clearly here, the SBM (Super Bull Market), starting in Mar 2009, will be replaced by a “Bear Market” (as a leading indicator) in 2027, and the GE (Great Expansion), starting in Jun 2009, also will be replaced by a “Recession” (as a coincident indicator), about six months later.
Conclusion
It’s human nature that we feel uncomfortable when we encounter an almost perfect environment in the economy and the market. In other words, my mind can’t be in full compliance.
Investors, nevertheless, climb the worry wall always because no-worry land never has been. All wise investors sharpen their investment tools and analyze their investment framework and data during this kind of peaceful time, as the wise sailors do the same on calm sea, after a storm.
