 This is Dan with another episode of my market analysis videos. After reaching a recent peak on July 27th, SPY, the SMP ETF dropped 4% in the last 20 days. On the hourly chart, SPY seemed to be getting support at a 442 level, although it dropped below 442 before market closed today. The daily RSI indicator is at the lowest level since May of this year. The low RSI level seems to be telling us that SPY might be poised for a rebound in the next few days. In the meanwhile, the bearish trend in the last couple of weeks might continue, and maybe some negative catalysts can pull down the market even more. Likewise, QQs representing the NASDA 100 also dropped 6% from its recent peak. Its RSI value is also very low, which might be signalling a rebound, provided that there is no negative catalyst to drag down the market any further in the next few days. Will the market be heading up or down? I looked at the charts and the macroeconomic events, and came to the conclusion that we are at a very important turning point for the market. It would be nice to have a crystal ball to help us see into the future. Unfortunately, I don't have that crystal ball. You probably don't have that either, otherwise you wouldn't be watching YouTube videos for clues about the market. I know, however, that if we catch the early signs of major catalysts or indicators, especially leading indicators, then I can buy during the early phase of a rebound and sell a shorter market when the market starts to take another major drop. It's all about having the right information quickly before most other people, so that we can make profits. So what are these catalysts and leading indicators that I consider to be important? They are, number one, the CPI, consumer price index, number two, PPI, producer price index, unemployment rate, bank failures, housing price, GDP, a gross domestic product, fat funds rate, bank upgrades or downgrades, moving average crossover, LEI indicator, I'll explain more about this later, and finally, Bollinger Bands, MACD, DMI, and RSI indicators. These are technical indicators. I wrote them in gray-colored fonts because I won't have time in this video to talk about them. If you follow my Twitter account, you will see my comments about these indicators when I buy or sell stocks. In the next few minutes, I will go over items one through ten. If you think what we are talking about so far might help you with your investment strategies, please click the like, subscribe, and notification buttons so that you will be notified when I post my next video. It will also help me with my YouTube ranking. Thank you very much. Let's continue. We have a lot of interesting stuff to cover. Let's look at CPI, the consumer price index, and the PPI, which is the producer price index. The July CPI measure year to year went up by 3.2% and month to month was up by only 0.2%. Now because the Fed's target for inflation rate is 2% year over year, a month over month rate of 0.2% is considered to be positive or good for the market. If the month over month rate stays at 0.2% or below for the next few months, the year over year rate will soon be about 2.4%. That means the Fed will achieve its inflation target soon so that they can stop raising interest rates. Once the Fed stops the rate hikes or even starts reducing interest rates, the stock market will shoot up. This is definitely a positive that the month over month CPI is only at 0.2%. The July core CPI, that's the CPI minus food and energy items, came in at 4.7% year over year and month over month is 0.2%. Again the month over month 0.2% is considered to be positive. The producer price index for July month over month was 0.3% versus a 0.2% prediction and because 0.3% is higher than a 0.2%, it's somewhat negative and the July core CPI month over month is 0.3% versus the 0.2% prediction so it's also negative. For the unemployment rate, the July number is 3.5% versus the 3.6% forecast. The unemployment rate has remained low at about 3.5% to 3.6% in the last few months even though the Fed has raised interest rate by more than 5% in the last 12 months. As long as the unemployment rate is less than 5%, it is certainly a positive catalyst for the stock market and for the economy. Let's look at bank failures and bank upgrades and downgrades. This is the historical background. When the Fed was raising interest rates very aggressively to fight inflation back in the 1980s, 1,043 savings and loan associations and those of banks, small banks, failed from 1986 to 1995 and the economy went into a rather serious recession. The stock market also tanked. For 2023 so far, 4 banks failed but compared to the 1980s, the relatively low bank failure rate is certainly a positive sign. However, the bad news is that on August 9th, Moody downgraded 10 banks and that's a negative sign. In addition, Fudge a few days ago issued a warning that they might have to downgrade dozens of banks. That's certainly a negative sign. The main reason for bank failures in 2023 is the fact that the Federal Reserve Bank increased the Fed funds rate by more than 5% in the last 12 months. If the Fed continues to increase interest rates in the next few months, it will certainly have a negative effect on the stock market and on the economy. According to Redfin, the average US housing price went down a little bit in 2022 but started to rebound this year. This is certainly a positive catalyst for the stock market. But if you look at the Case Shiller Home Price Index, it has been going up and up since 2012. The index dipped a little in 2022 but started to pick up again similar to what we saw with the Redfin Home Price. When this index reached a very high level in 2007, here the inventor of the index, Professor Robert Shiller of Yale University predicted a housing crash. The crash eventually happened and brought on the infamous great recession of 2008 and the market crash of 2008. The Case Shiller Index today is higher than even 2007. Actually, Professor Shiller recently said in a couple of interviews that he expected housing price to come down within the next 6 months. If and when the housing price and the Case Shiller Index start to come down, watch out. That's because the collapse of the housing market might cause more bank failures which might lead to a market crash similar to 2008. You can say the Case Shiller Index is slightly negative now. It'll be even more negative if it starts to drop in the near future. GDP. GDP has been going up in the last few months. In spite of the Fed rate hikes, this is certainly a positive sign. GDP usually lacks the stock market. Therefore, it is not usually a good predictor for where the stock market will be. But if GDP continues to drop in the next few consecutive quarters like what happened in 2008, it is certainly a confirmation of a very, very stock market that will continue to sink. That's why we have to keep our eyes on the GDP numbers. The Fed funds rate has been up by more than 5% in the last 12 months. If the Fed continues to increase rates, it will certainly bring down the stock market. I consider this to be a negative sign. The flip side is that if the Fed pauses the rate hikes or starts reducing interest rates in the next few months, it will have a positive or bullish effect on the market. When a short-term moving average crosses under a longer-term moving average, the market is considered to be bearish. The flip side is that when a short-term moving average crosses over the longer-term moving average, the market is considered to be bullish. On the chart for SPY, I'm showing with the blue line the 20-day Simple Moving Average or 20SMA, which is the middle of the Bologe band. The 50SMA is a blue dash line, the 100SMA is a yellow dash line, and the 200SMA is a red dash line. We can see that the 20SMA crossed above the 50SMA back in April of this year, which confirmed the bullish movement of the market back then in April. Even with the market drop in the last two weeks, these moving averages have not crossed over yet. That means it is still a fairly positive picture. Since the 20SMA crosses below the 50SMA, or if the 50SMA crosses below the 100SMA, etc., it'll be a very negative or bearish sign. Typically, when bearish crossover of these major SMAs happens, more selling and more market drop will be triggered because of the crossover. Let's talk about the LEI indicator, or Leading Economic Indicator, which is published by the Conference Board and is often a good predictor of market movements. This is a chart showing the LEI and GDP. As we can see, when the LEI goes down, GDP goes down, soon after that. Let's show the SPY ETF for the same time period. We will also draw these vertical lines to show the times when the LEI indicator crossed below zero and when the LEI started to rebound. We can see that for the years 2000, 2008, and 2020, when we had market crashes, the LEI dropped below zero shortly before the market crashed. After the LEI started to rebound, the market rebounded soon after. As of June of 2023, LEI is certainly negative, which confirms the fact that we are below the all-time high achieved in the beginning of 2022. The good news is that the June LEI number showed a small uptake from the previous month. If this uptake continues into a rebound, it will predict a stock market recovery. However, if the LEI turns downwards again in the next 2 to 3 months, the market will most likely drop more. For now, I will consider the indication from LEI to be negative. This is a quick look at the various components that make up the LEI indicator. I won't take up your time by reading the words. If you are interested, you can do a screenshot of the screen to read the words or you can Google with keywords LEI indicator to learn more about LEI. To sum up what I've been saying in the last few minutes, I would say that the market started to drop in the beginning of 2022, then recover somewhat from October 2022 to July 2023. It's been dropping since the end of July. As far as the catalyst or indicators that I consider to be important, the CPI index so far is positive, PPI somewhat negative, unemployment rate positive, bank failures or the lack of bank failures positive so far, housing price positive, GDP positive, Fed funds rate big negative, bank upgrades or downgrades somewhat negative because of the downgrades of the 10 banks, also the Fitch warning about potentially downgrading dozens of banks and if the downgrade of the dozens of banks became the reality, then this indicator will be even more negative. Moving average crossover so far is positive, the LEI indicator so far is negative but might be turning positive in the next few months. If we see more of these catalyst or indicators turning negative in the next few months, that means the market will likely go down. On the other hand, if we see more of these catalyst or indicators turn positive in the next few months, that means the market will likely go up. I'll be watching these catalyst and indicators very closely. What are my investment strategies in light of all these? In the last two weeks, I saw one-third of my long positions to lock in profits. I started to nibble and bought small amounts of T-Triple-Q and NVIDIA in the last few days because I wanted to buy on the dip. After I performed the analysis, I just explained this video and as the market closed down today, I saw shares of NVIDIA I bought on August 10th to lock in profit. I will sell more long positions and buy short positions like S-Triple-Q, EAP, SPY, and T-Triple-Qs continue to fall after today. I will monitor the catalyst and indicators mentioned in this video to catch leading signs of market movements. I will continue to hold some shares of stocks with good fundamentals such as NVIDIA, ASML, Google, Apple, Meta, Tesla, and SoFi Bank. I will monitor the technical indicators such as the Bolonger Bands, RSI, MACD, and DMI. I will inform my Twitter subscribers almost on a daily basis about my trades and my comments on market news. At this point, I'd like to remind you to subscribe to my Twitter or now it's called X-Account which is DanMarketL. In addition to subscribing to my YouTube channel, for example, on August 7th, I tweeted that I sold one half of my remaining SoFi shares bought on June 26th at 10.8% gain. And then on August 10th, I tweeted that I bought more T-Triple-Q because the CPI numbers posted on that day came in fairly low. And then on August 10th, remember when we have a low CPI number that's positive for the market. On August 10th, the same day, I sold one half of T-Triple-Q I bought earlier that day because the market started to turn south and I cashed in 2.1% profit. And then today, after market, I sold one half of the NVIDIA shares I bought on August 10th and profited 2% gain. SPY lost the 442 support today, which is a buried sign. I'm still holding some NVIDIA shares that I bought on August 10th and June 8th. Thank you for watching all the way here. I'd like to remind you to click the like, subscribe, and notification buttons. As usual, I will very much appreciate your comments, questions, and suggestions. If you know of any good leading indicators of market movements that I have not discussed in this video, please send me a comment. I might include more of these indicators in my next market analysis video. I'd like to remind you that I'm not a financial advisor. I share my stock trading strategies and analyses for educational and entertainment purposes only. If you want to buy or sell stocks, you should make your own decisions and you should definitely consult with your financial advisors before you do so. This wraps up my video for now. I will chat with you again in the next few days. In the meanwhile, I'd like to wish you the very best of luck with your financial investments.