{"id":70394,"date":"2024-09-01T23:17:01","date_gmt":"2024-09-02T06:17:01","guid":{"rendered":"https:\/\/drduru.com\/onetwentytwo\/?p=70394"},"modified":"2024-09-02T22:15:32","modified_gmt":"2024-09-03T05:15:32","slug":"stock-market-waiting-for-next-buy-signal-the-market-breadth","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2024\/09\/01\/stock-market-waiting-for-next-buy-signal-the-market-breadth\/","title":{"rendered":"A Stock Market Waiting for the Next Buy Signal – The Market Breadth"},"content":{"rendered":"\n

Stock Market Commentary<\/strong><\/h2>\n\n\n\n

At the beginning of August, you might have looked uninformed predicting that the S&P 500 would end up printing its 4th straight monthly gain. At its lows, the index wiped out gains from the previous two months and almost reversed May as well. Now, the index hovers just below its all-time high and looks like it is waiting for the next buy signal. The sell in May and go away adage<\/a> failed once again as a rule for stepping aside from summer trading. Instead, the new adage should tell traders to buy the summer swoons, especially the big ones.<\/p>\n\n\n\n

Anyway, what carries enough potential to send a stock market already at or near all-time highs even higher? The Federal Reserve delivers its next pronouncement on monetary policy on September 18th. Since the Fed is widely expected to cut rates, the event itself has more potential to disappoint than to provide a fresh catalyst. Instead, this meeting is likely to keep traders and investors focused on buying going into the meeting.<\/p>\n\n\n\n

Along the way to the Fed, the report on August jobs has the potential to deliver a buy signal. However, the room for error is small. The jobs report needs to be soft enough to justify rate cuts but not so soft to freak people out like last month’s episode. At the time, esteemed Wharton economist Jeremy Siegel piled into the stock market panic<\/a> insisting that the Fed needed to cut 75 basis points (0.75%) immediately and cut another 75 basis points at the September meeting. It was a picture-perfect classic case of a sentiment extreme signalling the end of the catalyzing market move. As the stock market sharply rebounded, Siegel felt compelled to reverse himself and smooth out his panic<\/a>. In other words, Siegel let the stock market sway his emotions and his interpretation of the economy; he over-extrapolated with a bias to shoot first.<\/p>\n\n\n\n

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