Gap-and-Go Tuesday

Good PPI excited Traders

BraVoCycles Newsletter
August 14, 2024

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News Buzz

Tech stocks took the baton in a broad rally following less-than-expected PPI growth.
Traders see a big drop in interest rates into 2025, at risk of underestimating inflation.
Starbucks had its best day ever after changing the CEO.

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Is SPX Bounce Over?

I called the July top and reversal on Monday last week.
Should I try to call the top of SPX bounce? Why not?
SPX was bouncing on a declining volume for the last 6 trading days.  Usually a bearish sign.
SPX is facing some resistances slightly higher: 1) 50D MA, 2) 61.8% retrace fib level, and 3) red down-trend resistance line.
Will they stop SPX?
61.8% fib would be an ideal target for ((b)).
Does SPX need to oblige to these resistances? No, they are just potential reversal levels.
As a matter of fact, one can make counterarguments: 1) CNN’s Fear & Greed is in the fear region, 2) Some cycle projections point up, 3) SPX is coming off oversold conditions, 4) SPX gapped over 10D EMA (red MA) establishing a ST trend up.
Overall, a mixed picture.

Do You Think SPX Has Topped?

Yes or No?

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Market Summary

Market Data

As of 9 pm on 13 Aug. 2024.

What Has Been

Traders reacted to a positive PPI with a gap-and-go market day in the US.
The US and Europe were green, Asia mixed.
Dow advanced 408.63 points or 1.04% to 39,765.64.
S&P 500 advanced 90.04 points or 1.68% to 5,434.43. Nasdaq advanced 407 points or 2.43% to 17,187.61.
Russell 2000 advanced 33.12 points or 1.61% to 2,095.2.

What is Next

The strong day on Tuesday eliminated a bunch of EW counts in NDX and SPX.
The CPI is the next major catalyst, not to forget the Middle East crisis and possible Iranian attack.
In the short term, the preponderance of evidence suggests still higher for major indexes, but caution is required as indexes can also turn soon, and as I mentioned on Sunday, it is a mixed picture, not an easy call.
My MT and LT views have not changed. . .

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