February 27, 2024 - The RightLine Report 

 
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                      NOTES FROM THE EDITOR
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There is a tendency for both Bulls and Bears to have tunnel vision. The constant influx of economic data, earnings information (past, present and future), geopolitical events, rising crude oil prices, inflationary outlooks and even tropical storms rolling off the coast of Africa, gives both camps plenty to pick through. Bulls tend to concentrate on good news and Bears on the bad.

Listening to the "market experts" will drive you up a wall. Not only will they tend to flip flop on their views, but often two firms will examine the exact same data and arrive at completely opposite conclusions. Market analysts love to play the game of Jeopardy. Most start off knowing the end result and then "find" a seeming rational reason to explain how it came about.

There are very few days when only good or bad news occurs. The market mavens tend to "cherry pick" through all available data and cite only that which supports their particular point of view. Years ago when I visited Aruba, I went to an area of the island that had cliffs and jagged rocks. It was here that garbage containing food stuffs was thrown daily into the ocean in an attempt to keep the sharks occupied. It was thought that this would keep them away from the popular beaches.

The fact is that for every seller of a stock there has to be a buyer out there or the transaction will not take place. One party sees the glass as half full and the other half empty. It is very difficult to filter through all the noise we are bombarded with daily. Keeping the sharks on one side of the island benefits the people, not the sharks. They would do better ignoring the artificial distraction and sticking to their normal behavior.

Once in a while it will do you good to turn the volume down on your television, or turn it off completely. Most financial commentators on television have the attitude that every day must bring a new crisis or a blessed event. They harp non-stop on whatever it is that draws their attention that particular day. Most of the time, whatever the news may be is forgotten by the next day. A new event will then become the "topic du jour" for the following session. The crowd mentality takes over and widespread euphoria or despair once again fills the air by the opening bell!

The trader who can keep his mind focused on his trading plan and execute it has a far greater chance for success than the trader drawn off course by all the noise.

Here's to good trades,

TC Salmon
Senior Analyst 

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                           "QUICK LIST"
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Stock     02/27     02/27      Buy      Short   Trailing Stops     Gain 
Symbol    Price      +/-      Entry     Entry   Initial/Tighten   Amount 
------  --------  --------  --------  --------  ---------------  --------

GOOS      13.49      0.38      13.7                  0.93/0.47      1.32
PLCE      20.05     -0.26     21.11     19.12           1.99/1       3.2
SYRE      24.91      0.90     25.24      22.9        2.34/1.17      3.04
HASI      24.99      0.42     25.58     23.93        1.65/0.83      1.84
DBX       23.98      0.47     24.46     22.84        1.62/0.81      1.22


The "Quick List" provides a brief summary of each stock write-up and should be taken in the context of the related write-up presented in the "Stocks Covered in This Issue" section of this Report.

Be sure to read "How To Use The RightLine Quick List" at https://prorightline.com/index.php/rightline-report-quick-list/. In addition,always use the RightLine Risk Calculator before entering any position. For access to the Risk Calculator, go to https://prorightline.com/index.php/risk-calculator/.

To learn more about controlling risk go to the RightLine Risk Control System at https://prorightline.com/index.php/rightline-risk-control-system/

For a glossary of terms unique to The RightLine Report go to: https://prorightline.com/index.php/glossary/

Questions? Send us an email using our contact form at: https://prorightline.com/index.php/contact-us/ 
 
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                           MARKET SUMMARY
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US stock markets closed with a mixed performance on Tuesday, as investors eagerly await the release of personal consumption expenditure (PCE) inflation data scheduled for Thursday. The technology-heavy Nasdaq and the S&P 500 saw modest gains, while the Dow Jones experienced a slight decline. Treasury bond yields saw a slight uptick, with the 10-year yield reaching 4.31%, while the 2-year yield rose marginally to 4.70%.

Over recent weeks, Treasury yields have surged, with the 2-year yield climbing approximately 0.55% from recent lows, reflecting increased expectations for Fed rate cuts to be deferred until midyear. Despite the uptick in Treasury yields, stocks have continued to advance this year, with the S&P 500 up over 6% year-to-date. This bullish movement is supported by stronger-than-expected earnings growth and resilient consumption data.

All attention is now focused on the upcoming release of PCE inflation data for January, scheduled for Thursday morning. PCE inflation is among the Fed's preferred inflation indicators, and expectations are for an increase in monthly figures, although year-over-year comparisons are anticipated to ease from last month.

Overall, it is believed that PCE inflation is moving closer to the Fed's 2.0% target, and while January data may indicate some seasonally stronger inflationary trends, core PCE inflation is expected to dip below 2.5% over the next several months, driven by softening shelter and rent components as well as moderating services inflation.

Over the first couple of months in 2024, there has been a moderation in expectations for Fed rate cuts, from five to six rate cuts priced in earlier in the year, to approximately three rate cuts expected, commencing in the June Fed meeting. This adjustment in market expectations follows upside surprises in inflation data earlier in the year, coupled with Fed officials expressing the need for patience before initiating rate cuts, especially given the better-than-expected economic growth. It is believed that this shift to three rate cuts starting in June aligns more closely with the Fed's perspective and the base-case scenario for 2024.

The FOMC is expected to update its economic and fed funds rate projections at the March 20 Fed meeting, where it is anticipated to raise its economic growth forecast for 2024 to some extent and reiterate its stance on patience, allowing inflation to decline more significantly toward 2.0% before considering rate cuts.


                       Feb 26, 2024           Feb 27, 2024   
                  --------------------   --------------------
Dow                 39,069.23   -62.30     38,972.41   -96.82
Nasdaq              15,976.25   -20.57     16,035.30    59.05
S&P 500              5,069.53   -19.27      5,078.18     8.65

NYSE Volume                       3.7B                  3.93B
NYSE Advancers                   1,136                  1,606
NYSE Decliners                   1,689                  1,224

Nasdaq Volume                    5.44B                  5.43B
Nasdaq Advancers                 2,321                  2,635
Nasdaq Decliners                 1,987                  1,628

                                 New Highs/Lows

                   02/20  02/21  02/22  02/23  02/26  02/27
                 --------------------------------------------
NYSE New Highs       119     96    227    272    195    181
NYSE New Lows         25     32     41     37     38     22
Nasdaq New Highs     112     59    247    263    223    254
Nasdaq New Lows       96    115    112    137     90     63

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                              TRADER'S TIP:  
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TRADER'S TIP: "Holding Their Ground"

Buying stocks isn't the first thing that comes to mind on days when the market is slammed with a big sell-off. However, these sessions can be very helpful for bullish traders. Stocks that show relative strength for the day - either posting a gain or only suffering a small decline - are often strong performers after the market stabilizes. This is especially true of equities that hold firm without any specific news story keeping them afloat; the relative strength reveals underlying technical strength and a solid commitment by investors. 
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                         THE TECHNICAL ANALYST
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This section contains important technical data for the three major market averages -- the S&P 500, the Nasdaq Comp Index, and the Dow Industrial Average.

For guidance on how to use this information, go to: https://prorightline.com/index.php/technical-analyst-section-rightline-report/ 
https://www.prorightline.com/rlch/022724SPX.jpg





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                             MARKET CALENDAR
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--ECONOMIC REPORTS AND EVENTS (all times are Eastern): 
MONDAY, FEB. 26					
10:00 am	New home sales	

TUESDAY, FEB. 27					
8:30 am	Durable-goods orders	
8:30 am	Durable-goods minus transportation	
9:00 am	S&P Case-Shiller home price index 
10:00 am	Consumer confidence
	
WEDNESDAY, FEB. 28					
8:30 am	GDP (first revision)	Q4
8:30 am	Advanced U.S. trade balance in goods	
8:30 am	Advanced retail inventories	
8:30 am	Advanced wholesale inventories	
12:00 pm	Atlanta Fed President Raphael Bostic speaks
				
THURSDAY, FEB. 29					
8:30 am	Initial jobless claims	
8:30 am	Personal income 	
8:30 am	Personal spending 
8:30 am	PCE index			
8:30 am	Core PCE index			
8:30 am	PCE (year-over-year)			
8:30 am	Core PCE (year-over-year)			
9:45 am	Chicago Business Barometer (PMI)
10:00 am	Pending home sales	
10:50 am	Atlanta Fed President Raphael Bostic speech				
11:00 am	Chicago Fed President Austan Goolsbee speaks				
1:15 pm	Cleveland Fed President Loretta Mester speaks				
7:40 pm	Kansas City Fed President Jeff Schmid speaks
				
FRIDAY, MAR 1					
9:45 am	S&P U.S. manufacturing PMI 
10:00 am	ISM manufacturing	
10:00 am	Construction spending	
10:00 am	Consumer sentiment 
10:15 am	Dallas Fed President Lorie Logan speaks				
10:15 am	Fed Governor Chris Waller speaks				
12:15 pm	Atlanta Fed President Raphael Bostic speaks				
1:30 pm	San Francisco Fed President Mary Daly speaks

For a chart of typical Up or Down market reactions to specific major US economic reports, go to "Economic Indicator Effects" at this link: https://prorightline.com/index.php/economic-indicator-effects/ 
 
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                              TRADER'S TIP: 
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TRADER'S TIP: "The Undercapitalization Myth"

"A loser is not undercapitalized - his mind is underdeveloped."

~ Dr. Alexander Elder 

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                      STOCKS COVERED IN THIS ISSUE    
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CONSUMER CYCLICAL SECTOR

Canada Goose Holdings Inc. (GOOS: Consumer Cyclical/Apparel Manufacturing) - BULLISH BOUNCE. If you are looking for another bouncer with profits in mind, GOOS fits the bill. Shares have been in retreat-mode lately, but now this stock is in the process of bouncing from support. Currently priced at 13.49, plan to buy shares at 13.7 and use a 0.93 trailing stop. Tighten the stop to 0.47 on a 1.32 gain. Earnings Report Date: May 16, 2024. Beta: 1.48. Market-Cap: 1.31B. Optionable.

The Children's Place, Inc. (PLCE: Consumer Cyclical/Apparel Retail) - SQUEEZE PLAY. In certain stocks a tightly constricted price range is a sign that neither bulls nor bears are confident of winning in the near term. This often means that the side that gives up first causes a quick move in the opposite direction. In these fear dominated skirmishes, opposing traders always benefit from the retreat. In the Squeeze Play setup you can actually play both sides of the inevitable surge. PLCE traders reached this state of stand-off on Tuesday with the tightest range of the past seven days. You can take advantage of their efforts by placing a low risk BUY trigger at 21.11 and a SELL short trigger at 19.12. After one of the two orders is filled, cancel the un-triggered order and place a trailing stop at 1.99 which can be tightened to 1 on a 3.2 gain. PLCE closed Tuesday at 20.05. Earnings Report Date: Mar 14, 2024. Beta: 2.08. Market-Cap: 250.17M. Optionable.

HEALTHCARE SECTOR

Spyre Therapeutics, Inc. (SYRE: Healthcare/Biotechnology) - SQUEEZE PLAY. Trader indecision has put SYRE squarely in the center of a Bull versus Bear standoff. This tight spot should soon give way to a clear winner in the short-term, and we want to be in position for the move. To do that we've set a BUY entry at 25.24 and a SELL short entry at 22.9. Now it's up to SYRE to show us which entry will be filled. Once the trade is underway place a 2.34 trailing stop, which can be tightened to 1.17 after you achieve a 3.04 profit. SYRE closed on Tuesday at 24.91. Earnings Report Date: Mar 04, 2024. Beta: 2.85. Market-Cap: 898.182M. Optionable.

REAL ESTATE SECTOR

Hannon Armstrong Sustainable Infrastructure Capital, Inc. (HASI: Real Estate/REIT - Specialty) - SQUEEZE PLAY. One interesting trait of price volatility is that it cycles back and forth through periods of expansion and contraction. Stocks that have recently seen their daily price range shift from an average or wide range to an extremely contracted state are ideal candidates for expansive price moves. In many cases the next move is relatively fast and covers a sizable amount of territory. To take advantage of these trades we use both a BUY and a SELL entry. This allows us to enter in whichever direction the breakout takes. In HASI's case we will enter a BUY should it reach the 25.58 level, or a SELL short trade if it drops to 23.93. As usual a trailing stop is essential, 1.65 which should be tightened to 0.83 on a 1.84 gain. HASI closed Tuesday at 24.99. Earnings Report Date: May 02, 2024. Beta: 1.85. Market-Cap: 2.84B. Optionable.

TECHNOLOGY SECTOR

Dropbox, Inc. (DBX: Technology/Software - Infrastructure) - SQUEEZE PLAY. The struggle between buyers and sellers has resulted in DBX's narrowest trading range of the past seven sessions. With neither group able to take complete control on Tuesday, the stock's short term destiny is up for grabs. You can capitalize on this unusually tight condition by placing both a BUY order at 24.46 and a SELL order at 22.84. Regardless of which order is triggered, cancel the other one and follow your entry with a 1.62 trailing stop. Tighten the stop to 0.81 once you have a 1.22 gain. DBX closed Tuesday at 23.98. Earnings Report Date: May 02, 2024. Beta: 0.77. Market-Cap: 8.249B. Optionable.


IMPORTANT: Before entering any recommended positions, always use the RightLine "Risk Control System" to determine the level of acceptable risk and the maximum number of shares to buy.
Link: https://prorightline.com/index.php/rightline-risk-control-system/

Use "Gap Adjusted Entries" to reset the Entry Price for stocks that gap beyond recommended entry levels.
Link: https://prorightline.com/index.php/gap-adjusted-entries-increase-profits/ 

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                           STOCK SPLIT SUMMARY
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Below are the stocks that have announced splits and have recently executed or will execute soon. There is generally a return to normal price behavior in the weeks following a split announcement in what we call a "Dormancy Phase." As the stock nears its split execution date it often moves into the "Pre-Split Run" stage where quick and sometimes dramatic gains can occur. 
                             Announce     Eff.       Split
Company Name     (Symbol)      Date       Date       Ratio   Options  
---------------- -------     --------    -------     ------  -------   

NOTE: The number of stock split announcments goes up during Bull markets, 
and goes down during Bear market cycles. There are currently no upcoming 
stock splits that meet RightLine's proprietary criteria for split ratio, 
trading volume and price action.

For a closer look at the different stages of a Stock Split go to: https://prorightline.com/index.php/trading-stock-splits-stages/ 
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Best of luck and have a Great Week!
 
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