The S&P 500 and NASDAQ 100 undercut their 50-day moving averages (50-DMA) to shake out weak holders before rallying into the close — a strong bullish signal. This appears to be a typical pullback, designed to alleviate some of the froth in a healthy bull market. When institutional investors are unable to complete their allocations during the week, they often add aggressively on Fridays. That late-week strength is a classic sign of accumulation and institutional support. Following the successful test of the 50-DMA, I anticipate the rally to continue.
Gold and silver have been consolidating their recent advances, trading sideways while holding their 21-day moving averages (DMA) and staying comfortably above their 50-day moving average (DMA) support lines. Institutions typically defend positions at the 50-DMA because they know retail investors tend to sell if it breaks. Central banks remain steady buyers of gold and silver as they diversify away from the U.S. dollar. With the dollar trending lower, commodities such as gold and silver are expected to continue performing well, given their inverse correlation. I continue to like both metals as inflation hedges and non-correlated diversifiers to traditional equity portfolios.
AI remains the dominant market driver as capital expenditures fuel strong sales and earnings growth across the sector. That said, a prolonged government shutdown could push the economy toward recession, and restaurant stocks are already trading as if the consumer is tapped out. Importantly, we’re not seeing a surge of IPOs, which suggests this is not a speculative bubble top.
Oil remains in a long-term downtrend as supply rises and demand stays steady. Bonds are range-bound, while Bitcoin is in a short-term downtrend—trading below its 50-DMA but holding at the 200-DMA. I don’t own Bitcoin, but we do hold significant gold positions in client accounts. We remain nearly fully invested across all model portfolios at Altruist. The bull market has more room to run!
God is love. John 4:8