"Watch Out for Friday's Market Dip: Slow Down for the Speed Bump! Fed's Rate Cut Might Be Less Than Expected!"
This video data is as of August 15, Thursday.
Howdy, Swings!
Today's jobless claims and retail sales data were favorable for the market, and as we predicted in yesterday's video, the market has risen. The market has risen so fast that it is already approaching the new danger level of 5550-5600 that we discussed earlier.
Will this rally continue without restraint, or will we encounter a speed bump tomorrow?
Let's take a look at Fullhapce’s Daily swing market forecast to get some answers.
Daily Market Moves.
The market saw broad gains, with the Nasdaq increasing by 5% and the VIX dropping by 24% this week.
SNP 500: 5543.22, 1.61% up.
Dow Jones: 40563.06, 1.39% up.
NASDAQ: 17594.5, 2.34% up.
Russel 2000: 2142.1, 2.40% up.
Ten-year bond interest rate: 3.93, 2.77% up.
Vix index: 15.24, -5.87% down.
Here is Daily sector performance.
On Thursday, many sectors saw gains.
Regional banks, tech companies, consumer goods, travel, capital goods, and autos were notably strong.
Some safer investment sectors like utilities, telecoms, Defense contractors, and consumer staples lagged behind.
Here are The reasons.
Stocks have been rising recently, partly due to strong earnings reports from the end of July, positive economic data, and some recent comments from the Federal Reserve.
News from sources like Bloomberg highlighted this optimism, mentioning phrases like “Quants Are Poised to Unleash a Wave of Cash in Stock Market” and “Goldman Buyback Desk Flooded With Record Orders During Stock Swoon.”
Major stock indices have recovered much of their earlier losses from the month.
As a result, there is increased anxiety and a sense of urgency among investors, leading some to follow the current market rally closely.
Here are Things to consider.
Indicators such as the Philadelphia Fed survey, NAHB housing index, import and export prices, and industrial production were not as favorable.
The Atlanta Fed's GDP forecast fell from +2.9% to +2.4%.
Investors are being overly optimistic about the possibility of a rate cut by the Fed, which could lead to disappointment later.
China's July economic data showed that growth slowed, and Japan's strong Q2 GDP could lead to tighter monetary policy.
Several companies have reported declining margins, which has caused stock prices to fall.
Trump has hinted that more tariffs could be imposed, and Harris is expected to argue for higher taxes on corporations and the wealthy.
Geopolitical risks remain.
Here is Daily Market Forecast for swings.
The weekly market upside potential calculated this week was strong, but the fast and large gains this week continued for several days, which may worry investors.
The daily market downside potential has been strong, as evidenced by the fact that today, for no particular reason, the market rally stalled at S&P 5550.
Daily volatility is rising again, with the S&P 500 Index rapidly approaching the area between 5550 and 5600, which we consider a new risk level, according to our calculations.
It is possible that the market would test the downward stress again; We might see the market close lower on Friday. In that case, we will be able to witness how the market behaves under downside stress.
While it is likely that the market will close lower on Friday or a day close to Friday, it is more likely to be a temporary blip rather than a long-term downtrend.
Here are some additional thoughts.
This week brought a flurry of positive news for stock investors, including good inflation data, solid growth, strong earnings reports, and supportive comments from the Federal Reserve.
The stock market is starting to regain confidence.
The economy appears to be stabilizing.
The concern is whether the growth will continue and whether stock prices are too high.
The Federal Reserve is not expected to make any significant interest rate changes in September.
This would be good news because the market favors steady growth with small rate increases.
Here is Devil's Advocate.
The opposite scenario is that the market is likely to continue its unbroken rise with no attempt to pullback.
In this case, it could be an opportunity for bullish investors to enjoy the rally and see if the S&P makes a strong breakout above 5600.
The rationale for this scenario is as follows.
Jobless claims and retail sales released this morning showed positive signs of growth.
The Federal Reserve is expected to cut interest rates next month.
Global consumer spending appears to be better than expected.
Corporate earnings came in better than expected.
While the opposite scenario has merit, we already had a similar situation in mid-July, so we don't think it's likely that the market will go higher than it did then without testing.
Regardless, viewers might want to be careful about the concerns raised by the opposing side.
Here is the Conclusion.
The market has risen so quickly that it is likely to test the bottom soon.
Market volatility could increase over the next few days, and there could be an attempt to close lower tomorrow.
It may be helpful to stay positive and consider taking some arbitrage or hedging against temporary risk.
Viewers may be wise to consider both out main forecast and opposition scenarios to manage risk effectively.
Thank you for watching.
Fullhapce Intelligence, the best investment partner for swing traders.