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Sept. 15, 2023 – “The Omen” refers to the Hindenburg Omen which is a group of market breath indicators that can occur at market tops. It was developed by James Miekka to provide a “heads up” / caution that the market was shaky. While all significant market corrections have been preceded by the Omen, not all Omen signals are accurate. Thus, it’s only a warning and a possible warning at that. Why do I bring this up? It just fired off.
I’ve been talking about the narrow leadership in this market for many weeks now so a Hindenburg Omen signal is not a surprise. Let’s not over react, but let’s be cautious. This week the European Bank raised interest rates; the feeling is the FED is likely to do that too before the end of the year. Congress is playing “chicken” with the national debt and inflation is still hanging on (with the help of oil prices/ Saudi and Russian interference).
The big wild card is what will happen as we approach the end of September. If the US credit is downgraded, interest rates will go higher . . . and stay there. Hopefully the Republican Congress can figure this out . . . . it’s Econ 101 folks. The Short-Term Sector Strength table is shown at: www.Special-Risk.net .
Friday was options expiration, so maybe, just maybe, things will begin to settle next week. But I would not count on it just yet. I remain in roughly 50% Cash and 50% invested; dancing close to the exit doors.
Have a good week. ………….. Tom ……………