In the Temptations classic “Papa Was a Rolling Stone,” a son reminisces about a father he never met and only heard terrible things about him. Even in rally mode, the stock market is much maligned. For investors seeking the truth about the value proposition, it's hard to cut through all the negative scuttlebutt of the narrators. 

However, investors are not allowing the pain and skepticism to become theirs, as the rolling disk has risen considerably.

The same Tide of (positive) Anticipation

Friday's session underscores the excitement and opportunities to make big money as the Federal Reserve shifts to rate cuts.

There was lots of bottom fishing and contracting buying in Consumer Discretionary (XLY).

Green Shoots

Last Friday was just a monster session on light volume, which tells me people are eager to buy, especially in the absence of excess noise.

Growth Leadership

I know the rotation out of mega-cap growth into anything else is the hot narrative of the moment, but the truth is the rallies feel better when growth is leading the charge.

Greed is Back

Don’t look now, but ‘greed’ is back and moving in the right direction. The Fear & Greed Index is a great contrarian tool when at the extremes, but right now, the story is direction and moment.

It's moving quickly in the right direction.

Double Top Angst

The S&P 500 comes into September at a double top, often a bearish chart formation. There must be a breakout this week, or the odds of a pullback are high.

And then there’s history, which is not favorable for September.

Today’s Session

Coming into the session there are more stocks changing hands above their 50-day moving average than the July all-time high.

Although the rally has broadened, equal-weight people are still eating the smoke of the cap-weight S&P 500.  Big Tech and other mega cap growth names must play a leadership role.

By now everyone has heard or remembers that September can be the cruelest month. The reputation alone starts the week off on shaky ground.

Comments

Charles Could that double top also be a cup and handle with a sharp rather than a rounded bottom? Ric Walter Ric Walter on 9/3/2024 9:47:03 AM

The cup and handle formation hasn't been completed yet. Karina Hernandez on 9/4/2024 8:59:47 AM

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