Building on the five things that Bofa's chief strategist Michael Hartnett laid out as potential price action indicators that would be bullish:
Put-call ratio (best old school “max fear” indicator) surge to 1.30 confirms Wall St "fear" and trading opportunities if…
XBD broker-dealer index (risk-on/off indicator) holds 200dma level of 262,
SOX semis index (leadership of US bull market) rebounds above 4000 (high in 2022 which unbelievably broke last week),
XHB US homebuilders index (like SOX was perfect “sell the first rate cut” play, peaking just before Fed cut 50bps in Sep) rallies showing “rate-sensitives” are sensitive to lower rates (XHB currently discounting negative payroll print),
US gasoline prices (up 6% past 2 weeks) fall below $3/gallon driven by new OPEC shift to higher production…US consumer needs lower inflation & rates to breathe (MAGA needs MACA…”Make America Cheap Again”).
Of course, we now know that tariffs ended up jumping much more than that, to over 20%...
