NVDA rallied strongly. The earnings report beat expectations and pushed the price up +8.7%, driven by a morning move that left a consolidation/indecision for the afternoon. Interestingly, MU closed slightly in the red at -0.3% and AMD at -0.9%, failing to participate in the rally, while AVGO and TXN did so with +4.4% and +1.8% respectively.
The SPX gained traction, recovering its central weekly level while facing resistance at the monthly level of 7,729 (proving how these pre-modeled levels can contain moves when institutional algorithms react to them). The SPX managed to fill the gap opened at the bell, so today’s move can be considered clean from a price action perspective. The only risk technical criteria to watch are the resistance at the mentioned monthly level and breadth (stock participation) as described below.
Tomorrow, the Fed Chair speaks in Jackson Hole. Many people are expecting a hawkish tone and a subsequent selloff in the market. Macro indicators do not contradict that thesis, considering sticky and elevated PCE inflation, strong domestic demand and consumer spending, robust business investment, low unemployment and labor market resilience, and very importantly, geopolitical supply shocks.
Those aspects are detailed below for paid members, along with the most important chart of the week.
Macro indicators suggest a hawkish tone is possible tomorrow, and as mentioned, price action looks okay, no gaps, just indecision in the afternoon. However, the second technical aspect to watch, stock participation brings a key element to consider ahead of Jackson Hole: technology was the only sector moving up today. The rally was driven by NVDA (followed by CRM and the software industry), but megacaps like AMZN, GOOG, and META stayed in the red, along with AMD and MU as mentioned above.
SPX: Daily Gains per Sector:
Today’s Agenda:
The most important chart to watch today
Macro considerations
Daily Plan for the SPX and ES=F
Combined levels for SPX, ES=F, NVDA, MU, AMD, AVGO, and SMH