8/14 Recap

We are mostly done with earnings now, the only big one that hasn’t reported yet is NVDA. We have Walmart this week which is another big barometer of the health of the consumer so we will have to see how that goes. Otherwise, we remain mired in the same downtrend we’ve been in recently where the SPY keeps getting rejected at the 8 ema and remains firmly below it. We are going for our 9th daily close in a row below the 8 ema. The short term weakness has really played out since the first break below it.

While Tech has been the laggard for a while now, it could be argued the QQQ is forming a falling wedge which is bullish. I drew it below, it would need a break out of that to validate the thesis. Still though it could go a few more days inside this wedge before it needs to decide up or down.

The dollar as you can see below is putting in a reversal candle at a major spot right now. If this plays out and is really a top, it could be a tailwind for equities. We had some news today that the fed is expected to start cutting rates in 2024 which would weaken the dollar.

Even alot of the megacaps that are bouncing today are still stuck below the 8 day exhibiting material weakness since their earnings.

MSFT has been bidless so to speak since its ER drifting lower today it broke out of its wedge. This is what I was saying back when it reported when referencing how although it is a great company, it would likely will remain weak for the period ahead.

AAPL is the same story, bad report and now sustained weakness below the 8 ema. Ideally, unless it is a long term holding you just ignore names below the 8 ema completely.

What names are over the 8 ema and exhibiting strength at this moment in the “Magnificent 7” ? It won’t shock you because these were the 2 with the best reports and reactions but Google and Amazon. So only 2 of the 7 are showing strength at this moment. That tells you alot about where we are.

GOOG is forming a big bull flag over that earnings gap looking to push higher.

AMZN pulled back to the 8 ema and now bounced breaking that downtrend of the last 6 days. This should continue to ride the 8 ema higher if the market holds up.

NVDA is in a class of its own up 6% today, it had gone down so much that even a 6% move and it isn’t over the 8 day yet. It is putting in a bullish engulfing candle on some serious volume though.

While today’s move in NVDA is surprising, it almost isn’t because I’ve noted many massive deep in the money put sales here over the last 2 weeks, remember all these. People typically don’t sell massive deep in the money puts on names they expect to go lower. The options still point to move higher for NVDA over the next few months.

Trends

BABA has taken over on all timeframes, it did have a great report last week but China has been such an awful trade for so long. AYX has seen nonstop bullish action since it crashed, lots of people positioning into it. AYX is one of those companies where the product is great, but the company is poorly run. Ask anyone who has used it how much productivity was gained. Over the last week 3 of the top 4 are pretty much China trades with the EEM being skewed to China.

1 Week

2 Week