Welcome back!

I started writing this post in the dark because we lost power during a tropical thunderstorm here in Santa Teresa, Costa Rica and the concept of simplicity came to mind.

Since the start of the summer, I have been living in this amazing little beach town- the type where everyone knows your name (Cheers theme song plays in the background...if you know, you know 🤷‍♂️ ) and life is very, very simple here which makes you slow down and just enjoy it!

What do you practice to slow down and reset?

Being right on the beach I prioritize catching the sunrise and watching the sunset because I know how much energy it feeds me- not just calming or relaxing me (which helps with stress and anxiety) but more importantly it gives me time to self reflect, reset, find clarity, fulfillment and prioritize the things that really matter.

I. Mindset

Would you describe your life as beautifully simple or tragically complicated?

In a world with unlimited options, we struggle to adopt and apply the wisdom of simplicity to our daily lives.

How can we find clarity through the mess?

The most natural way to simplify your life is to strip away everything that is not essential.

Is there anything on the above list you don’t want more of? Then stop complicating your life chasing things you neither need nor really want based off what you see everyone else doing- on social media, at work, on tv etc.

The simple things in life don’t disappoint.

II. Money

Sticking to the wisdom of simplicity, when it comes to money everything you spend money on has two cost: the cost to purchase and the cost to maintain it/or time it requires. The latter being what often gets people into trouble, the compounding effect of their choice- for example maintenance of that expensive new car or house.

There’s no limit to how complicated things can get on account of one thing always leading to another. Unless simplicity is a goal that we work to accomplish and defend relentlessly, our lives will increasingly become complex, overwhelming and unmanageable.

Be comfortable with risk. Be comfortable with the uncomfortable.

III. Markets

It’s been a rough August thus far for the Bulls to say the least; all three major US indices (S&P 500, Nasdaq and Dow Jones Industrial) closed last week down over 2% falling below their 50-day moving average for the first time since March. Rising Treasury rates- as the 10-yr note yield hit 4.31% Thursday (highest level since November of 2007) before closing the week at 4.25% and late summer seasonality (lower trading volume) were the biggest catalysts.

What to watch this week 🤓 

• Nivida NVDA earnings on Wednesday will be the headlining event as it has been the HOTTEST stock year to date. Their announcement will be a key guide for the Tech sector momentum the next couple of weeks. See our NVDA chart analysis below and what we are watching.

• Powell’s speech at Jackson Hole - Markets had a huge sell off at last year speech which lasted into October with Powell’s extremely hawkish tone. Will history repeat itself or will we get a different softer tone this year is the question?

• Dead cat bounce? As of Friday’s close, markets reached extremely oversold conditions so a bounce is due...will Bulls step in and buy the dip or will it just be a dead cat bounce before it’s next leg lower is what we’ll be watching.

Our last post we said to look for Nasdaq and the S&P 500 to cool off some and consolidate after such a big couple of weeks and indeed they have.

Late summer seasonality (lower trading volume) and rising rates played the biggest cause for the selling pressure. So what now heading into September?

The Dow Jones Industrial Average DJI broke that neckline of the inverted Head & Shoulders pattern we mentioned and has pulled back to retest it’s breakout level. It is very important for Bulls to hold above if markets are looking to break this 4 week slump.

Swing Trades Recap 📊

We got stopped out most of our swings for some BIG gains with all that selling pressure last 4 weeks. Let’s see what kind of market bounce we get before putting risk back on.

Here are some charts we are watching this week:

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10-yr Yield The 10-yr Government treasury yield is looking to break over its October 2022 highs of 4.33% if it does look for it to head to 4.50-4.60% and then 5.00 -5.20% (highest level since 2007). Remember a rise in interest rates is not good for risk on assets such as stocks, options, crypto- so if it trades to 5% look for markets to remain weak.

NVDA Nvidia the best mega stock up +223% year-to-date reports earnings on Wednesday; it’s announcement and forward guidance will help or hurt markets oversold technical bounce and overall sentiment the next 2-4 weeks.

Bitcoin sold off sharply last week as SpaceX announced it sold $373M worth of bitcoin. $25,000-$26,000 is a critical level for Bulls to hold during this multi-month consolidation period we are in since March. Failure to do so could see it test $22,000 and $20,000 especially if the financial markets make another leg lower the next 2-4 weeks.

COIN after trading to $110 on better than expected earnings has sold off sharply down -33% in 5 weeks. It does look like it wants to base at this $72-$74 level. Being so oversold in the short-term a bounce trade maybe setting up.

*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.*

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See you next week!👋