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Here is a quick recap of Markets for the Week of September 6th, 2024 and what we are watching this week
S&P 500 $SPY -4.2%
Nasdaq Composite $NDX -5.8%
Russell 2000 $IWM -5.7%
Dow Jones Industrial $DJI -2.9%
The major indices all registered sizable decline on this holiday-shortened week.
The downside bias was related to fears about a weakening labor market and economic growth prospects.
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Key points from last week:
ADP Employment Report for August- was weaker than expected yet the unemployment rate declined slightly 🔴
Weakness in the Semiconductor space- PHLX Semiconductor Index ($SOX) dropped 12% this week led by Broadcom ($AVGO) which slid 15.9% after relatively disappointing guidance that piled onto current fears that the pace of growth is slowing for many richly-valued semiconductor stocks 🔴
Treasury Rates Un-Invert- with short-term yields falling faster than longer ones in anticipation of aggressive rate cuts by the Federal Reserve. This brings fear as the yield curve un-inverting in the past has signaled a recession was about to begin 🔴
S&P 500 Heat map for the week
S&P 500 Sector performance for the week, month of August and last 3mths
🚨Our Trades Recap📊
$SPY: As the S&P 500 traded down to our 540 target selling off 4% from the watchlist our SPY hedge SPXS gave a nice +12% gain last week.
SPXS is a 3x leveraged S&P 500 Bearish ETF
💾 $NVDA: NVIDIA also from the watchlist sold off sharply over 18% after reporting decent earnings that did not live up to high expectations.
🗓 The Week Ahead 🧐
Monday, September 9th - Friday, September 13th, 2024
Attention this week will be focused on:
Consumer Price Index (CPI) - Overall prices are expected to rise 0.2% in August that would match the 0.2% rise in July. Annual rates, which in July were 2.9% overall and 3.2% for the core (both 1 tenth lower than June), are expected at 2.6 and 3.2%, respectively.
- CPI is a measure of the change in the average price level of a fixed basket of goods and services purchased by consumers. Monthly changes in the CPI represent the rate of inflation for the consumer.Producer Price Index (PPI) - Producer prices in August are expected to rise 0.2% on the month vs. a marginal 0.1% rise in July. The annual rate is seen at 1.8% vs. July's 2.2%.
- The Producer Price Index (PPI) of the Bureau of Labor Statistics (BLS) is a family of indexes that measures the average change over time in the prices received by domestic producers of goods and services. PPIs measure price change from the perspective of the seller.Consumer Credit - is expected to increase $12 billion in July vs. an increase of $8.9 billion in June.
- The dollar value of consumer installment credit outstanding. Changes in consumer credit indicate the state of consumer finances and portend future spending patterns. The report includes credit cards, vehicle loans, and student loans; mortgages are not included.
Most Anticipated Earnings this week
🚨Our Watchlist 👨🏫
$SPY: S&P 500 double topped after failing to break July’s highs at 563 and has pulled back sharply to start September on fears the economy is slowing down faster than expected.
SPY closed Friday right on 540 support, failure to hold it has room down to 535, 530 and 525. It also now has plenty of resistance above at 550 and 560.
This week’s key inflation data CPI/PPI should give us an indication of what to expect at the next Fed Meeting on September 18th.
SPY needs tor reclaim 545 for a move to 550,553,556,560. Under 538 look for 535,532,528
$QQQ: The Qs and Mega Cap Tech are down 10% from their highs in early July closing Friday testing a critical support level at 448.
This area was previous resistance which it broke over back in March. Failure to hold it might cause some panic selling similar to what happened in August.
Under 448 look for a move down to 440 and 430 to start. Reclaim of 450 has room to 455 and 465 which will be strong resistance for it now.
Reclaim of 450 look for 455,458,460,465. Under 445 has room down to 440,435 and 430
$SMH: Semiconductors are now down 24% from their July highs after trading below our 220 target from our callout here a few weeks back.
A Semiconductor bottom should initiate a bounce for the Qs and Mega Cap names.
SMH is in a strong downtrending channel testing 215 support; it needs to reclaim 225-235 resistance for anything exciting to happen. Under 210 has room down to 200 and 190.
SMH over 220 trades to 225,228,233, and 238. Under 213 pulls back to 210,205,200,195
*None of these stocks above are recommendations to buy, sell or trade. We do not give financial advice, you should always do your own due diligence and practice proper risk management.*
If you are interested in seeing how we are looking to trade these names reply back or comment Swing Trades below for more information.
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