A Slow Step Of The Reborn Bull Market In September?

Introduction

In the second half of August, the S&P 500 (the Economy, SPY) advanced nicely, with the Punchball Market and the Ratchet Market: The former cleaned up the Bull Highway, and the latter ratcheted the market up to the Bull Plateau.

On August 30, the market showed a typical productive trading in an immediate term (of a few seconds to a few sessions), as a first session in the post COVID-Pandemic 4 years (2019 - 2023).

On September 01, the first day, gave us a cheerful gain read, quite opposite to the August first 4 sessions in the losing column in a row. In a short week after the Labor Holiday, nonetheless, the temperature of the market dropped very low, leading by Apple's (AAPL) slump, impacted by the decision of the China on a ban of iPhone use in the government offices.

Buyers didn't have any convictions due mainly to the spike of Oil prices, affected by the oil production cut of the OPEC and Russia. Another bearish factor was that the prices of services were sticky, so investors expect another round of the Fed rate increase in the Sep 19 - 20 meeting.

The 5-Months Old Uptrend on the PPO Domain, as of Sep 08

Table 1 reported that Bulls vs. Bears was 11 vs 17 in Aug and Sep (08), narrowing the deficit by 1 point on Sep 08. In Aug the market started 4 sessions (Aug 01, Aug 02, Aug 03, Aug 04) down in a row, Hence, a Correction was called.

September started in the plus column on Sep 01 (Fri). But in the short week, we had 3 negative ("m") points in 3 sessions in a row, Tue (Sep 05), Wed (Sep 06), and Thu (Sep o7). Then, We had 1 positive ("P") point Today (Sep 08, Fri).

As a result, the weakened current Uptrend couldn't recover: It was a bit worse on the M & T front, from 10 vs. 14 (4 points deficit, as of Sep 01) to 11 vs. 17 (6 points deficit, as of Sep 08). The Friday votes, however, improved from 3 vs. 6, as last Friday (Sep 01) to 4 vs. 6 on Sep 08, Fri).

Still not fully recouped, but the market perspective in a few weeks in Sep is expected to become much relieved.

To reconcile Table 1 and Table 2 with their data, please view Table 11 & Table 22, respectively in TABLEs after the main text.

The TDI (Trifecta Distribution Index) on the PPO Domain, as of Sep 08

In the TDI (Trifecta Distribution Index) front, the Bull Tps vs. Bear Tms was 08 vs. 10 (2 deficits) in Aug and Sep (01) (which had no entries of either for bulls or for bears). This bearish picture was drawn because Jul (11 vs 4) (which was one of the best months) left out.

As of Today (Sep 08, Fri), the TDI was worse a bit, adding only 1 deficit more as 08 vs. 11 (3 deficits). It's only 3 points short but it is expected to be bullish again in Sep.

Note that, as shown in Table 3.1 (which was brought here instead of "TABLEs" to exhibit what happened from Sep 01, Sep 05, Sep 06, Sep 07, and Sep 08, we view only 1 Tm on Sep 6 (Wed) among five sessions.

We very clearly to see a ripple effect of the China-Apple connection, resulting the plunge of Apple on two sessions on Sep 06 (Wed) and 07 (Thu), and a rebound Today (Sep 08 Fri). As a consequence, bears picked 1 Tm on Wednesday only.

Remember again we gained a lot with the Punchball Market and the Ratchet Market in the second half of Aug, so I expect the second half of Sep would be bullish again.

The SDI Movement on the Diffusion Domain, as of Sep 08

The SDI (S&P 500 11 Sector Diffusion Index) rose to 47%, as of Aug 31 (as seen in Table 44 in "TABLEs") from 40% in Aug 25, and on Sep 08 (Friday) declined to 44%, as shown in the above Table. Therefore, the SDI also needed a 5% increase or so.

The Economy (SPY, the S&P 500), as of Sep 08

In August, the market seemed to be a great divergence between the PPO Domain (with the Uptrend and the TDI), and the Weight Domain (with The U.S. Economy, SPY, the S&P500).

As seen in Table 11 (in TABLEs after main text.), there were more "m" and less "P" in the first half. As shown in Table 5.1, bulls gained less than bears did. In the second half, the same trend, having more gains for bulls than for bears.

The first half was a negative trend while the second half was the positive trend.

The S&P 500 (the Economy, SPY) was down just less than -1.7%, moving down in Aug. It lost -4.7% for three weeks in the first half, but it moved up +3.1% in two weeks in the second half steadily.

In September, the S&P 500 descent -1.44% (on Tue (Sep 5), Wed (Sep 06) and Thu (Sep 07) together) while it ascent only +0.32 (on Mon (Sep 01) and Fri (Sep 08) together), as shown in Table 5.2.

The Economy and the Market Perspective in September

The U.S. Economy (SPY, the S&P 500) is strong due mainly to the strength in the AI (Artificial Intelligent) front with 7 mega companies (Facebook (META), Apple, Microsoft (MSFT), Amazon.com (AMZN), Netflix (NFLX), Google (GOOG) (GOOGL), and Tesla (TSLA)).

Some commentators concerned about "being too concentrated with 7 Bigs" but this economic phenomenon pinpoints exactly where the meat is in the current economic structure. That is the fact.

As Reported:

" The three major indices closed with modest gains, albeit off their highs of the day. Early upside moves had the S&P 500 and Nasdaq approaching their respective 50-day moving averages, which acted as areas of congestion over the past four weeks.

[BRIEFING.COM] Apple (AAPL 178.18, +0.62, +0.4%) drove a lot of the index level price action today. Apple had been up as much as 1.5% around the time that market hit session highs, but shares ultimately closed just modestly higher than yesterday. With today's move, Apple still declined 6.0% this week following reports that Chinese officials are being prohibited from using Apple devices.

Other mega caps were relative outperformers, offering some support to the broader market. The Vanguard Mega Cap Growth ETF (MGK) rose 0.3% and the Invesco S&P 500 Equal Weight ETF (RSP) rose 0.1%.

Eight of the 11 S&P 500 sectors closed in the green led by energy (+1.0%), which climbed alongside oil prices ($87.47/bbl, +0.50, +0.6%). The real estate sector (-0.6%) logged the biggest decline.

Rising rates had kept pressure on the stock market this week, so today's muted action was a welcome development. The 10-yr note yield, which hit 4.22% earlier, settled unchanged from yesterday at 4.26%. The 2-yr note yield, at 4.92% earlier, rose one basis point to 4.97%.

This morning's economic data calendar was limited to wholesale inventories for July, which fell 0.2% (Briefing.com consensus -0.1%) following a revised 0.7% decline in June (from -0.5%). Next week's lineup features the August Consumer Price Index on Wednesday.

Nasdaq Composite: +31.5% YTDS&P 500: +16.1% YTDS&P Midcap 400: +5.9% YTD Russell 2000: +5.1% YTD Dow Jones Industrial Average: +4.3% YTD ( source)

The Concluding Remark

Last week Apple played the role of the King on the stage of the drama about the global economy and market. I have to remember the last word of the late Steve Jobs, "Beautiful!".

AI penetrates in all areas in the economic and market research, the industrial production floors, and the high-tech engineering fields, and even in writing articles in my room.

The productivity enhancement, quality improvements, and still a lot of available "free" services (such as free online trading, online writing, proofreading helps from Google and Microsoft, etc.) have not been properly measured yet. The potential adjustments upward seem to be somewhat unlimited.

For example, my case witnessed the interaction between a writer and the so-called "language bot [LB]": I have been a Microsoft "WORD" writer since 2012 in Seeking Alpha. My submission process has been much slower than the PDF files.

Last year Microsoft provided an upload App of the WORD submission which transmits my file within a few seconds. Not only that, the LB makes summaries automatically for me. All I have to do is checking them, changing some parts if needed.

If we consider the benefits from the AI assistances in the economy (SPY, the S&P 500) as a whole, there are no doubt the understatements in all kinds of reports, accounts, and data, existing everywhere.

That's why I am so optimistic about the market perspective not only in September 2023, but also in the foreseeable future as well.

TABLEs