The DAX climbs to a fresh high straight into its top alert, and the long yields are lining up behind the same warning
Stocks bounced on Friday, although the major indices still closed the week in the red. The S&P 500 gained 0.4%, the equal-weight version of the index 0.6%, the Dow jumped 1.0%, the Nasdaq added 0.4%, and the Russell 2000 rose 0.9%. The bounce came despite a further rise in yields, which climbed across the curve as investors increasingly dismissed the Treasury’s buyback program as too small against the forces pushing borrowing costs higher, and the odds of a September Fed hike moved up toward 40%. The August flash PMIs were bullish, with growth momentum strengthening while inflation cooled, but the growth signal itself fed the move in rates. Brent edged up to about $94.10, gold spiked 2.25% and silver jumped 1.9%. The week ahead brings the July PCE on Wednesday, Warsh’s Jackson Hole speech on Friday, and the Nvidia and Salesforce reports on Wednesday night.
Two stories from this letter’s recent coverage moved again on Friday, in opposite directions. The real-asset floor kept paying, and both legs of that call are on the record. The gold turn flagged on August 5 and the silver confirmation that followed on August 9 both delivered another up day on top of Wednesday’s surge. The DAX, which the August 15 review named the next candidate for a momentum crossover and which completed that crossover on Thursday, answered with a fresh high instead. The model has not blinked. The German index holds the bearish maximum for a second reading, the rate complex now escalates behind it with both long Treasury yields moving to the edge of the same extreme on the very day yields rose, and underneath, the Nasdaq 100 joins the Composite on the bottoming side, so the thin tech floor flagged on Thursday has broadened by one index.
Our daily analysis filters roughly 45 global markets and condenses every detected cycle into a single Consensus Score between -100 and +100, where +100 is the strongest reading for a possible upward turn and -100 for a possible downward turn. Values beyond ±60 mark the critical zone, the range where the cycle model raises the alarm for a possible trend change. Today the scan shows eleven markets in the critical bottoming zone, where declines could end, and eight in the critical topping zone, where rises could stall or reverse. Let’s take a closer look.
