23-10-24-BuyLine

The HCM-BuyLine® went negative on Friday, pushing us to reduce exposure to equities yesterday, and we will continue reducing exposure again today. There is a lot going on, not only from an economic point of view, such as the Fed raising rates 11 times and being embarrassingly behind on every decision, but also from a geopolitical perspective. Russia and Ukraine, China and Taiwan saber rattling, and Israel, our only true allies in the Middle East, against what appears to be everyone, as sad as it is.

23-10-24-TLT

Chart: TLT 1-year daily

The Fed has successfully crushed fixed income. Those of you who thought bonds were safe might need to rethink that. (TLT) the 20-year Treasury was at a high of $179.00 per share on 3/21/20 and is now at $84.00 a share. It will take someone who invested in those bonds in 2020 a decade to get back to even. That makes the stock market look a lot more attractive.

23-10-24-RSP

Chart: RSP 1-year daily

It is truly a bizarre market, with just 7 stocks leading the rally and not much more. The equal-weight ETF (RSP) of the S&P 500 is down -3.5%. If you have not been heavily invested in the magnificent 7, you in all probability have made no money or are down for the year on your investment.

23-10-24-SPY

Chart: SPY 1-year daily

We will reduce exposure and be patient and wait for the trend to turn back up. There will be opportunities, but for the time being, letting this storm pass is the prudent course of action.