Galloping Toward the Fed
Isn't it amazing how a market can face a loss so significant yet rebound so quick? The question is: Who is doing the rebound? Institutions or retail markets? Maybe a bit of both.
What we saw last week was a full return on any losses incurred in the last two weeks. Bargain shopping can be fun only if you know when to let go.
Now we are heading this week right into the big fed decision. The expectation is he will no longer allude but make a more concrete announcement on a rate cut. This one is interesting though as a rate cut lead to a market run yet this one may be different as it alludes to a recession.
So let's consider a few stocks top of mind for the week.
Here is my analysis for the week of Aug 19th:
NVDA (Nvidia)
We have earnings coming in Aug 28th and it's always a nice setup to consider as you lead into earnings. The technicals already show that they are in or continue to push into an oversold state. It looks like there is a still some room to add to this already oversold state yet it seems difficult to keep it going leading into next week. The TA will take over and allow the stock to come down in advance of the earnings calls.
We are just a few points away (136+) from it wanting to make a move downward.
Let's chat about our friend the S&P 500 (SPX). This one has a direct link to the Fed and what he intends to show us this Thursday. We already know that the vast majority of tech stocks that can influence movement here have had their earnings this quarter.
As expected from my post last week, we did make the run to break even and then push past where we were. I do sense that the run needs to decompress a bit as indicators are beginning to signal a correction. Yet many are awaiting the Fed to speak. My sense is that this week we will get a dip as TA is showing us it is ready. Then once the Fed speaks it could be a day or two of volatility and we wait what moves the market once to make long term. It's hard to believe that the Fed will announce a rate cut when the market has already corrected itself. Seems like the cut to come will be one to make it count vs sprinkles on a sundae.
