Can the bulls fight back?😰 - Sunday Brief

What’s up traders. Big Sunday brief coming in hot before you start your week.

We’ve got some important material to break down in this one you won’t want to miss before venturing out onto the charts this week.

Let’s get into it…

Impact Snapshot

  • Existing Home Sales (Tues.)

  • Services / Manufacturing PMI (Wed.)

  • New Home Sales (Wed.)

  • Jobless Claims (Thurs.)

  • Durable Goods Orders (Thurs.)

  • FED Chair Powell Speaking (Fri.)

  • Key Earnings: 

Market Evaluation

August is so far shaping up to be the worst month of the year for stocks.

As the selloff in US stocks gained momentum last week, with the S&P 500 posting its first three-week slide since February, so did the appetite for options contracts betting on more losses.

Last week, the July retail sales report showed sales grew 0.7% during the month, nearly double what economists had predicted.

Some pivotal events in the days ahead, and a closely watched speech by FED Jerome Powell may not even be the biggest test of all.

Eyes will be on the crucial earnings report on Wednesday from to set the tone ahead.

NVDA helped ignite the artificial-intelligence rally that’s powered the benchmark’s roughly 14% advance this year.

Powell's commentary on the path forward for interest rates, the overall state of the economy, and any suggestion inflation pressures are prompting a rethink of the Fed's current goals will be in focus.

The risk this time is he leans into the prospect of additional tightening this year, which may crimp expectations for growth at a time when worries are mounting over China.

Markets Breakdown

As you’ve heard us say before, we’ve watched this market auction higher for several months.

As the auction was taking place, we have continually been uncomfortable with the underlying structure and supporting volume.

The markets appeared to be driven by technical retail buying.

Both hedge funds and long only managers, both July and August appeared to have been driven sharply higher by hedge fund short covering and some institutional buying.

If you’ve been following our previous Sunday reports, you’ve constantly heard the refrain that short covering can weaken the market.

If short covering is joined by meaningful, new-money institutional buying then the market may remain strong.

The volume during the rally of the last several months did not show signs of solid new institutional buying. We still don’t see indications of larger institutional money on the sell side.

It is not unusual for the markets to drop by seven to ten percent before institutional money begins to get nervous.

Be sure to check out our Twitter(X) post Here where we’ve mention our previous long term view which we’ve posted over a month ago on our Newsletter.

Which was seeing the failure to hold 4500 and the result of rotating down bellow to the exact levels we are facing right now.

Friday’s session was a worthy mention as well as the price action was a perfect balance between our levels with a pullback towards 4352 and the last target we’ve reached was the first upside resistance of 4395. Read the update Here.

The market has turned lower and has not yet found a level where two-sided trade can take place.

For the week ahead, our focus for the coming week remains on the Market's ability to hold above 4350. Failure to do so would increase the odds of another downward leg.

ES

The key target zones we will observe for the Week Ahead

  • Main pivot: 4350

  • Upside Levels: 4411/4458/4497

  • Downside Levels: 4327/4306/4262

That’s all we got for you in this week’s Sunday brief.

We hope you all have a profitable week out there on the charts.

As always, if you found value in this post feel free to share it with a friend. Referral rewards are live!

Also, we had some CRAZY wins last week from our Pro members using the QuantVue TradingView system:

If you want our entire Pro toolkit risk free for 30-days click the b__utton here:

We’ll see you Tuesday.

Cheers!

Disclaimer: Futures and options trading carries a significant level of risk and may lead to substantial financial losses. The content provided in this newsletter is solely for informational purposes and should not be construed as a trade recommendation or financial advice. It is essential for readers to independently assess and make their own investment decisions, taking into consideration their personal financial situation and risk tolerance.