Good morning everyone - hope the week’s been treating you well so far. It’s Thursday, and we’ve already had a few market moving headlines roll through. The big one was the GDP revision yesterday, which came in hotter than expected at 3.8% for Q2, showing the economy’s still got some legs thanks to resilient consumer spending. That gave stocks a bit of a lift at first, but it also reminded everyone that the Fed isn’t out of the inflation woods yet raising eyebrows about future cuts into EOY.
Looking ahead, the big number to circle is PCE tomorrow - that’s the Fed’s preferred inflation gauge and the one they lean on hardest when shaping policy. Consensus has it ticking up around 0.3% for August, which will either cool some of the rate-cut chatter or add fuel to it depending on how it lands. Until then, we’re in a bit of chop - positioning and flow are doing more of the steering than fresh macro surprises.
Let’s take a look at how the indices are shaping up so far this week.
SPY Daily
SPY is going to close above the 20D SMA after gapping below the 10D overnight and testing the 20 during todays session. Ideally this was a healthy pullback which was very much needed allowing charts to reset and firm back up amid some consolidation / pullback into moving averages. The growth names were nearly vertical for weeks and everyone wants a pullback until they get one…
QQQ Daily
Similar story but tech actually reclaimed the 10D SMA briefly today which eventually rejected the mark. AAPL has been chugging along leading the charge as of late with many of the other Mag-7 tech stocks consolidating their latest moves up & AMZN continuing to plunge lower. As for NVDA, the chart looks good for another leg up if the market can cooperate which would only fuel further upside across the broader market as their hand is nearly in every pie at this moment.
IWM Weekly
I chose to chart the weekly on this chart for a specific reason. IWM was looking to breakout of a 4 year resistance level heading into the week. On Monday, the ETF had actually breached this mark however failed to hold and ended up closing just below followed by two more sessions of selling. Small caps can be finicky in every essence of the word. If/when this finally does get the breakout, the positioning currently is relatively offsides all things considered and can provide an entirely different rally fueled by smalls. Something to keep an eye on and certainly worth watching for a different approach of positioning.
Let’s dig into today’s flow grab with some nice setups looking forward as each dip provides a new opportunity across the board allowing charts to “breathe” if you will.