Broad Market Levels - August 18, 2022: Is a New Bull Cycle Building?
August 19, 2022
Knox Ridley
Portfolio Manager
Is a new bull cycle building? Last week Knox examined if the bear market rally will crumble or if a bottom is present. This week Knox notes that the high-frequency data continues pointing toward a slowdown with inflation. The ECB's tone is getting more aggressive, while the FED’s tone is getting less aggressive, suggesting that a new bull cycle is building as we speak. However, with data pointing towards a slowdown in rate hikes and inflation, we are seeing rates press new lows, and how the US dollar is pushing higher, only a few percentage points away from new highs.
Furthermore, crude oil appears to be bottoming and suggesting a run to new highs. In short, the macro factors have been putting pressure on equities and are not buying what the equity market is pricing-in yet.
Until we see 5 waves develop in the S&P 500 off the June low, accompanied by the USD confirming a top and rates signaling the low is in, calling for the end of the bear market is premature. Watch the broad market levels video update taken from I/O Fund's Premium 1-hour webinar below.
00:00 - Key Levels in the S&P 500
04:02 - Structure of the Leading Diagonal
05:13 - Small Caps
07:08 - Macro Assets/Commodities Pushing Equities
10:20 - The U.S. Dollar
12:12 - Crude Oil
Read Knox's Technical Analysis Commentary below.
Bond Market, Crude Oil, and Equities
The bond market is not buying bonds, suggesting that they are not buying the narrative driving equities; crude oil looks to be bottoming, suggesting another run higher is probable. When you factor in the macro forces that have been putting pressure on equities that are not lining up with the narrative expressed in the equity market, it’s worth being cautious until we know more.
Bull Market Signals
Assuming that this is the start of a new bull cycle, we only have 3 waves up off the low. This means we are not even done with the 1st wave of 5 in a new bull market that would likely move into 2023/2024
USD Signals
Until we see 5 waves develop in the S&P500 off the June low, accompanied by USD confirming a major top and rates signaling the low is in, calling for the end of the bear market is premature. Our plan is to wait for 5 waves to complete (wave 1) and then buy into the 2nd wave retrace.
Watch the Broad Market Clips from the Week of August 15, 2022:
Catch up on I/O Fund Broad Market Updates
This is Still a Warning Sign - Broad Market Analysis
Broad Market Levels Update - August 10, 2022 - Knox reviews why there’s still some uncertainty about whether this is the bottom or not.
About I/O Fund Premium Stock Investing Services
Premium Members currently enjoy all 7 Premium benefits below.
- Premium library of institutional-level research and analysis, including fundamental stock analysis and advanced market signals on technicals and macro analysis.
- Weekly Webinars on advanced market signals and broad market, plus quarterly portfolio reviews on Long-Term Buy and Hold tech stocks.
- Technical Analysis on stocks and Broad Markets with charts on all major US markets, analysis of inflation and growth, as well as 60 global markets to help us focus on risk/reward for entries and position our portfolio based on the macro-environment.
- An Active Forum made up of a community of like-minded investors with robust conversations including both fundamental and tech product analysis.
- A completely Transparent Portfolio made up of long-term buy and hold positions, crypto, and Long/Short Momentum positions.
- Trade Alerts are sent directly to your phone via SMS and email.
- NEW! Automated Hedge with advanced signals to help spot approaching risk in the markets, with a 67% win rate going back to 2003 with only 40 signals triggered.
About I/O Fund Portfolio Manager Knox Ridley
Knox Ridley began consulting on portfolios in 2007 and is an experienced growth investor in both bull and bear markets, which is hard to find these days. As the portfolio manager of the I/O Fund, he beat the top-performing funds on Wall Street in both 2020 and in 2021. His real-time trade notifications to premium subscribers have garnered 27 entries with over 100% gains in the last two years. Knox began his career as an ETF wholesaler in 2007 before becoming a portfolio consultant for large RIAs, FAs, and Institutional accounts. He is very keen on macro trends and is trained in Fibonacci Trading, Elliott Wave theory, as well as Gann Cycles. He also uses classical technical analysis to manage risk and identify great risk/reward setups. Knox is known for increasing and decreasing allocations for record-breaking returns.
Gains of up to 403% from our Free Newsletter.
Here are sample stock gains from the I/O Fund’s newsletter --- produced weekly and all for free!
+344% on Nvidia
+403% on Bitcoin
+218% on Roku
*as of March 15, 2022
Our newsletter provides an edge in the world’s most valuable industry – technology. Due to the enormous gains from this particular industry, we think it’s essential that every stock investor have a credible source who specializes in tech. Subscribe for Free Weekly Analysis on the Best Tech Stocks.
If you are a more serious investor, we have a premium service that offers lower entries and real-time trade alerts. Sample returns on the premium site include 324% on Zoom, 601% on Nvidia, 445% on Bitcoin, and 4-digits on an alt-coin. The I/O Fund is audited annually to prove it’s one of the best performing Funds on the market with returns that beat Wall Street funds.
More To Explore
Newsletter
The Strongest Cybersecurity Stocks In Q3
Cybersecurity stocks have performed well in 2023, rising about +26.5% YTD, with the security backdrop boosted by an increase in data breaches and ransomware.
Nvidia’s Fiscal Q3 Earnings Preview: The Pressure Is On
Nvidia has surged this year with 241% gains YTD, which has more than doubled the returns of the FAANGs. This is no small feat considering it’s widely understood Big Tech is holding up the broader mark
Apple’s Services Growth Flywheel Continues To Strengthen
Apple’s Services segment was one of the brightest spots in a relatively in-line earnings report at the beginning of November, topping an $85 billion run rate as growth jumped back to the high double-d
Tesla Sells 33% Of Vehicles Below Average Cost, BYD Pulls Ahead
BYD more than doubled Tesla’s China sales in October as Tesla’s sales slipped on a month-over-month basis, while NEV startups showed strong sales numbers across the board. China’s new energy vehicle (
Solar Stocks Still Searching For A Bottom
Solar is arguably one of the market’s most sold-off industries at the moment, with the Invesco Solar ETF falling more than 42% YTD as the industry struggles to find growth in a high-rate environment.
Five Stocks (Not Seven) Can Lead to New Highs
The majority of other sectors are confirming a continuation of the 2022 bear market, meanwhile, a handful of big tech names, with outsized weighting in the major indexes, suggest that they want to go
Big Tech Stocks: Q3 Earnings Preview
Earnings season has officially kicked off, with Big Tech headlining a busy week next week: Microsoft and Google report on Tuesday, followed by Meta on Wednesday, and Amazon on Thursday. Big Tech stock
AI Could Be Apple’s Next Chapter
After Nvidia added $750 billion in value this year on the backs of surging AI chip demand, investors are quickly searching for the next trillion-dollar AI winner. AI is the best investment opportunity
AI is the Best Investment Opportunity of our Lifetime: Video Interview
Real Vision invited Beth Kindig back for a candid interview with Raoul Pal for a one-hour discussion on how to position for AI. As discussed in the interview, the reason that AI will be the best inves
The Next Market AI Will Disrupt Is Cybersecurity
Cybersecurity is one of the highest costs that enterprises face at 12% of IT budgets on average, and this cost is rapidly rising. While a company can lay off staff or reduce marketing and R&D expenses