Summary
Phil Anderson reviews H1 2024 market performance as confirmation that the second half of the real estate cycle is progressing as expected, highlighting outperformance in MLPs, homebuilders, and small-cap stocks as cycle-consistent signals. He flags an anticipated near-term pullback in late July/early August before a bullish run into end-2024 and through 2025, and updates the watchlist with Valaris (VAL), EOG Resources (EOG), and the US Dollar Index (DXY).
Key Claims
- S&P 500 returned 15% in H1 2024, consistent with the PSE roadmap’s forecast of a strong first half — confidence: high
- U.S. MLPs (Alerian MLP Index) returned 18% in H1 2024, outpacing the S&P 500 — confidence: high
- A broad commodity basket was up ~7% YTD as of this email, consistent with second-half real estate cycle demand dynamics — confidence: high
- The Russell 2000 recently posted its largest-ever five-day outperformance vs. the S&P 500, signalling broadening market breadth — confidence: high
- New 52-week highs in the U.S. jumped to their highest level in over three years on July 16, 2024, described as “incredibly bullish” — confidence: high
- Nvidia (NVDA) topped on June 20, 2024, coinciding with the summer solstice, cited as an example of a seasonal/Gann turning point — confidence: high
- The SPDR S&P Homebuilders ETF (XHB) and U.S. bank stocks (tracked via KBE) are breaking out to new highs, consistent with second-half cycle sector rotation — confidence: high
- The US Dollar Index (DXY) is breaking below near-term support at 104; historically the dollar tends to weaken in the second half of the real estate cycle, though Anderson notes the data set is limited — confidence: medium
- A near-term pullback in late July/early August is anticipated per the 20- and 60-year roadmap curve — confidence: medium
- The pullback is expected to resolve into a bullish run into end-2024 and continuing through 2025 — confidence: medium
Mex Pete References
- EOG Resources (EOG): described as forming a series of higher lows over two years with resistance around 137 would represent new all-time highs.
- General note: Anderson reminds readers that stocks holding sideways or making a higher low during a market pullback are the “breakout setups to really focus on” in Mexican Pete chart patterns.
Stock Picks / Signals
- Valaris (VAL) — offshore oil stock; watching for breakout above prior high resistance at $80. No explicit buy signal issued; described as “nearing a breakout.”
- EOG Resources (EOG) — oil and natural gas producer; newly added to watchlist. Key resistance at $137; a move above would be new all-time highs. No explicit buy signal; setup stage.
- US Dollar Index (DXY) — bearish bias; watch for break below $100 as significant breakdown level. Suggested instrument: Invesco DB US Dollar Index Bearish Fund (UDN) for those wanting to position against the dollar.
- SPDR S&P Homebuilders ETF (XHB) — noted as moving to new highs; cycle-consistent sector to watch.
- SPDR S&P Bank ETF (KBE) — bank stocks breaking out; flagged as cycle-consistent.
Predictions / Forecasts
- Near-term weakness expected in late July and into early August 2024, per the 20- and 60-year roadmap curve.
- S&P 500 and Nasdaq pullback anticipated but viewed as temporary; bullish run into end-2024 and through 2025 expected to follow.
- US Dollar Index to move toward 100 flagged as a significant bearish breakdown.
- EOG Resources: breakout above $137 would mark new all-time highs — no time target given.
- Valaris (VAL): breakout above $80 resistance — no time target given.
Notable Quotes
“That’s resulting in a couple things you should note. First, check some of the sectors that are leading the rebound. The SPDR S&P Homebuilders ETF (XHB) is recently moving out to a new high… Those are among the sectors that should be moving higher at this stage in the cycle, which provides more evidence that the second half is progressing as expected.”
“And did you notice the date of Nvidia’s recent top? That happened on June 20, an important seasonal date with the summer solstice (Northern Hemisphere). Remember to pay attention to seasonal dates along with other Gann dates. They can mark important emotional turning points.”