Defensive stocks are slipping, while Nasdaq has generated a full-bet signal | Park Se-ik, Executive Director, Chesley Investment Advisory [Chesley AI / 26.10.03. Saturday]
- What to look for
- You can examine concrete supporting evidence, including the weekly chart and RSI position of the 10 year yield, the pattern of increases in July (month 7), August (month 8), and September (month 9) followed by an October (month 10) peak, the precedent of a double top in oil prices, and Chesley AI's allocation ratio.
- Why it matters
- This helps you examine rally scenarios by connecting patterns in yield peaks with the prerequisite of stable oil prices, and interpret the timing of rotation between defensive and growth stocks.
AI summary
Park Se-ik of Chesley says the 10 year Treasury yield has not yet turned down on either the weekly or daily chart, and that it fell to 5.17 intraday before rebounding. Citing the patterns in 2022 and 2023, when yields rose in July (month 7), August (month 8), and September (month 9) before peaking in October (month 10), he anticipates a yield peak and a market rally this October (month 10) as well. He identifies stable oil prices as a prerequisite, citing the theory of securing Venezuelan oil and the precedent of oil prices falling after a double top at 130 dollars in 2022. Pointing to the S&P500's long-term upward trajectory from 3,500 in October (month 10) 2022 to 7,800, he emphasizes a philosophy of bargain buying whenever negative news triggers a correction. He describes weakness in defensive stocks, a rotation toward growth stocks, and Chesley AI's increase in its full-bet Nasdaq allocation range from 70~90 to 90~100. He examines foreign investors' call selling and put buying, a VIX of 16, and a relief rally driven by weak employment, adding expectations of negotiations with Iran before November (month 11) 3. His base scenario is a rally as yields fall in October (month 10), November (month 11), and December (month 12), but he leaves open the possibility of a correction resembling late 2018 if high interest rates intensify. All directional forecasts are the speaker's conditional judgments, not definitive predictions of short-term prices.