Reversal or New High

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News Buzz

• FED stealing the stock market spotlight from Trump and Haris as Powell readies rate cut.

• FED chief Powel signals at Jackson Hole that weak August jobs data would punch ticket 0.5% rate cut.

• Bitcoin jumps after FED’s Powell signals rate cut.

• Fed Chairman Powell's remarks fueled a broad rally and sent Treasury yields down. Rate-sensitive small caps, EVs, and homebuilders got the most traction.

• NVDA reports next week.

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Semiconductor Index – TA & Cycle Targets

• Important SOX index is lagging the rest of the market.

  On Thursday, it stopped at the 50D MA and confluence of relevant Fibonacci levels, including a 61.8% retrace fib of the drop from the July high.

  Notably, it had an outside reversal day on Thursday, which is bearish. Observe what happened after the previous four outside reversals. Not bullish.

  On Friday, it had an inside green day, which does not alter the bearish indication.

  Powell gave a speech at Jackson Hole on Friday.

  It looks like more investors/traders were selling before the speech than buying after the speech. Which group is “smart money.”

  If we consider the major speech by Powell at Jackson Hole to be like FED’s days, the analogy would be that Friday’s gains should be reversed on Monday. We shall see.

• The chart above will make many technical analysts bearish.

• But “don’t jump the gun.”

• SOX has an outstanding 40D cycle projection significantly higher.

• And if it gets there, it will likely generate an even higher projection above the July high.

Dow Jones Industrial - TA

• SPX and NDX also had outside reversal on Thursday, followed by inside days on Friday, just like SOX.

• However, DJI already negated the bearish outside reversal on Thursday with a bullish candle on Friday. Fake out?

• Which index is right? Go figure.

• A majority vote, or each index on its own?

• I will examine more aspects of this tricky market juncture in the premium content.

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Market Summary

As of close on 23 August 2024.

What Has Been

• Powell gave a speech at Jackson Hole on Friday. 

• It looks like more investors/traders were selling before the speech than buying after the speech. Which group is “smart money.”

• If we consider the major speech by Powell at Jackson Hole to be like FED’s days, the analogy would be that Friday’s gains should be reversed on Monday. We shall see.

• Asia was mixed, Europe and the US green.

• Dow advanced 462.3 points or 1.14% to 41,175.08. 

• S&P 500 advanced 63.97 points or 1.15% to 5,634.61. 

• Nasdaq advanced 258.44 points or 1.47% to 17,877.79. 

• Russell 2000 advanced 68.67 points or 3.19% to 2,218.7.

• Treasury yields were down.

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