Weekend Report for Monday, August 12
Bottom Line:
From last weekend’s report:
The bull market / bear market debate is legitimately in play. IF we are in a bull market the downside from current levels should be fairly limited. Even if we are now in a bear market we will soon see a ferocious rally.
Last Monday turned out to be a huge, climactic down day and from Monday’s print low to Friday’s print high the SPX rallied 4.68%. The NDX rallied 6.5%.
From a price structure perspective the US indices are all pretty much in synch; the primary US indices all had a climactic Monday low and then rallied strongly into Friday’s high.
Putting aside a discussion of whether or not the US stock market is bull or bear, Monday’s lows in the respective indices are definitively important.
The potential paths of the indices at the moment are numerous regardless of bull or bear. And, as I have pointed out many times, if we are now in a bear market there will be great trading opportunities due to increased range and volatility in both directions.
PDF: Weekend Report_2024_08_12
VIDEO: https://youtu.be/upO03zMSfc8
__________________________________________________________________________________________________
SPX
Upper KRAs: 5380-5414; 5566
Lower KRAs: 5215-5187; 5139-5101
I don’t think we simply trade vertically straight back up from here. The 5380-5414 KRA is a good candidate to maybe see the current rally stall and balance a bit. Ideally any retracement will hold 5215-5187.
NDX
Upper KRA: 18629-18777
Lower KRAs: 17983-17842; 17526-17322
DOW
Upper KRAs: 39735; 40074-40345
Lower KRA: 38769-38492
RUT
Upper KRAs: 2095-2110; 2171
Lower KRAs: 2040-2026; 2002-1984
New York Composite
This is an index of every stock listed on the NYSE, so it is a broad composite view.
Upper KRAs: 18492; 18847
Lower KRAs: 17878-17817; 17618-17523
Internals – VIX
VIX spiked to 65 on Monday and closed at 38.65. It has collapsed since.
The Monday spike could be marking an important low in the larger bull trend in the US indices. However, I would be surprised if we see VIX dip into the low teens (or lower) again anytime soon.
It will be important to watch the trend of VIX next week.
___________________________________________________________________________
US 10-yr. Notes
If Notes are going to test 116’16-117’03 they should not decline much more from current levels.
US Dollar
Lower lows and highs. Favor shorts.
Gold
Gold is stair-stepping higher in two-sided trade. It is increasingly likely to move sharply out of this multi-month Balance Area. It is making higher highs and lows, so I would give the upside the benefit of the doubt. However, if it begins taking out downside levels I would not stand in front of it.
Crude
Crude is in a wide range and very whippy within that range. I don’t have a high confidence view of Crude at this time.
