Weekly Wisdom: NVDA Does Not Excite - Summer Doldrums

Greetings fellow traders and welcome to your August 29th edition of Weekly Wisdom: Levels to Know and Moves to Look For!

Now let's get to what we're currently seeing in these volatile markets and what we have our focus on going forward.

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Taking a look back on this week, August 26 - 30:

• Markets have forced bulls to utilize extra patience this week as $SPX futures have continued to chop sideways in the range that began last week after the large run higher in the first half of August.
• $SPX futures have formed an 80-handle range that started last Monday, roughly between 5580 and 5660.??
• The last week of August and the first week of September are typically slower around the end of summer / Labor Day weekend, so while the action may be less exciting, it should not be too surprising.??
• Monday and Tuesday of this week both broke the low volume record for the year so far.
• Data for the last week of August began on Monday with a solid beat for durable goods drders m/m at 9.9% vs 4.0% expected. Core durable goods orders m/m was a miss at -0.2% vs 0.0%.??
• Tuesday delivered a beat for the Conference Board's consumer confidence index coming in at 103.3 vs 100.9 expected. The Richmond Fed manufacturing index was a miss at -19 vs -14 expected.??
• Wednesday did not bring any new data throughout the trading session. $NVDA reported “good” earnings after the close, but it was not a blockbuster beat and not enough to send the stock higher.
• Thursday’s weekly unemployment claims were roughly inline at 231,000 vs 232,000 expected. Q2 GDP was revised and came in at 3.0% vs 2.8% expected. The GDP price index q/q was also a beat at 2.5% vs 2.3% expected. The goods trade balance was a miss at -$102.7 billion vs -$97.7 billion expected. Wholesale inventories m/m was inline at 0.3%. Later in the morning, pending home sales m/m was a miss at -5.5% vs 0.2% expected.??
• Friday, August 30 ends the week with PCE and core PCE price index m/m, as well as personal income and personal spending m/m at 8:30 a.m. ET. These are followed by Chicago PMI at 9:45 a.m. ET. Then, we’ll see the latest University of Michigan consumer sentiment and inflation expectations at 10:00 a.m. ET.

Here's what we are eyeing next week, September 2 - 6:

Level Highlights:

• $SPX futures, as mentioned above, have drifted sideways throughout the last trading week of August, continuing to form a range between 5580 support and 5660 resistance.?
• This gives the range an 80-handle measurement, which means a break higher could lead to a move up to 5740, while a breakdown could lead to 5500.??
• Markets are closed on Monday for Labor Day.
• The major events traders will be watching next week for clues as to which way the range will break will come on Wednesday and Friday with the latest jobs numbers.??
• Traders seem to still be leaning toward a 50bps rate cut for the Fed’s September meeting, so any clues of this changing toward 25bps, which will likely come from strong data leading up to the meeting, may open the door for some market weakness.?
• $VIX is also stuck in a range between 14.50 and 17.50, so a break of either level before $SPX futures break may give a signal as well.??
• $VVIX is also back under 100 and continues to downtrend, with 110 as the resistance level to watch for on any upside strength.

Upcoming News:

• Monday, September 2 markets are closed for Labor Day.
• Tuesday, September 3 starts the shortened week off with final manufacturing PMI at 9:45 a.m. ET. We’ll then see the latest updates for ISM manufacturing PMI, ISM manufacturing prices, and construction spending m/m at 10:00 a.m. ET.??
• Wednesday, September 4 starts off with the trade balance update at 8:30 a.m. ET. We’ll then get the update for JOLTS job openings and factory orders m/m at 10:00 a.m. ET. In the afternoon, the Fed releases the latest Beige Book at 2:00 p.m. ET.??
• Thursday, September 5 begins with ADP non-farm employment change at 8:15 a.m. ET. Next comes weekly unemployment claims, revised non-farm productivity q/q, and revised unit labor costs q/q at 8:30 a.m. ET. These are followed by final services PMI at 9:45 a.m. ET, and then ISM services PMI at 10:00 a.m. ET.?
• Friday, September 6 ends the week with average hourly earnings m/m, the unemployment rate, and non-farm employment change all at 8:30 a.m. ET.

Here's Your Chart of the Week:

Via LSEG, Reuters:? Bets that the Federal Reserve will soon cut interest rates have been weighing on the US Dollar?

Source

SPY Daily Update:

$SPY continues to chop in its range that began forming in the beginning of last week, with 554 as the support line and 564 as the resistance line .

SPY Weekly Update:

$SPY weekly chart is forming a continuation hammer as this is recovering well off of the week’s lows so far - this has been a very strong month for $SPY and some more time in the first half of September may be needed before continuing to press into new all time highs and beyond.

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-Patrick Hawe

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Disclosures

Patrick Hawe's current positions:

*As of 2:26pm ET August 29, 2024

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