[OFFICIAL] S&P 500 Market Watch

[aurvandil]

Monday 08 Jul 24

The market pushed to a new ATH of 5626 on favorable NFP numbers. As expected, new jobs added were larger than anticipated. However, the unemployment rate moved up to 4.1% due to increased labor market participation. This push-up was well supported by the Treasury market, with the sell-off in bonds from Powell's comments accelerating and causing large spikes down in yield across the entire yield curve.

Looking forward, we have a busy week ahead. Powell will be testifying on Monday and Tuesday, CPI data will be released on Thursday, and earnings season starts on Friday with JP Morgan, Citi, and Wells Fargo reporting earnings. The market appears well hedged, with the VIX at 12.48. CPI is likely to come in hot, but if it is in line with expectations at 3.1%, the market is likely to rally.

The expectation is for the market to continue to grind up, barring CPI coming in way higher than expected. This slow grind-up price action is likely to be extremely painful for those on the wrong side of the trade. The 5650 to 5660 range appears to be the key level to watch. Once the market breaks above this, the path to 5700 appears unobstructed.

 

[aurvandil]

Tuesday 09 Jul 24

It was a slow start to the week, with the market making a fresh ATH on the open and extending the ATH to 5639.75 after the RTH close. The price action is very similar to the lead-up to last month's CPI, suggesting that the CPI print might not come in as hot as previously feared. Like last week, the current price action is bullish.

Powell is testifying today and tomorrow, but no substantive new information is expected. The anticipation is for him to make more cautiously dovish statements, purposely telegraphing the move to prevent unwanted spikes when the FED makes the first rate cut. Powell will be joined by Yellen, who, unlike Powell, is not politically neutral. It is expected that she will make statements to help with the re-election of her boss.

The recent move up has caught a lot of shorts on the wrong side of the trade. The common expectation going into the 4th of July was for a fairly sharp sell-off to 5450. Currently, the slow grinding market is extremely difficult for those on the wrong side of the trade. The slow move up means there is hardly any pullback for them to unwind. The market will move gradually up until there is a capitulation point where the majority give up. The expectation is that this will be the 5650 to 5660 level, with the obvious event risk catalyst being if CPI comes in within expectations and there is a breach of 5660.

 

[highsulphur]

This market is relentless. Absolute no pull back last few days or weeks

 

[aurvandil]

This market is relentless. Absolute no pull back last few days or weeks

Very painful for those on the wrong side of the trade. We got capitulation tonight. Powell all but announced that upcoming CPI is going to be ok.

 

[wutawa]

This market is relentless. Absolute no pull back last few days or weeks

isnt it good with no pull back? my holdings shoot up in jul.

 

[highsulphur]

isnt it good with no pull back? my holdings shoot up in jul.

Always looking to buy more

 

[highsulphur]

Very painful for those on the wrong side of the trade. We got capitulation tonight. Powell all but announced that upcoming CPI is going to be ok.

I didn't see any capitulation at all

 

[aurvandil]

Thursday 11 Jul 24

The market pushed up strongly on positive comments by Powell, reaching a new ATH at 5690.50. Market internals were very strong, with all 11 sectors of the S&P registering gains. The VIX moved up as well, suggesting there was a fair bit of hedging, but the push was so strong that the hedging did not slow the market down. Yields have stabilized, and there are tentative signs that the yield curve is finally starting to un-invert.

The price action is similar to that of last month. From the price action and Powell's testimony, we can infer that this month's CPI probably looks quite favorable. Once this is confirmed after the release, we are likely to see a further push up from hedges coming off.

Looking forward, the key level above is 5725. If the market breaks above this level, there is a good chance for a run to 5800. The feeling of FOMO is very strong, and there is a good chance this will fuel the move up to exceed all expectations.

 

[aurvandil]

Friday 12 Jul 24

The rally is over for the moment, with a secure top at 5707.75. This reversal came on news that CPI came in cooler than expected. The shift from disinflation to deflation has sparked concerns that the Fed might have over-tightened, raising fears of a hard landing for the U.S. economy. Market is now back at the SoC of where it was trading before Powell's dovish comments.

The selling appeared rotational, concentrated in technology, communications, consumer discretionary, and consumer staples. There were sharp spikes down in yields across the entire yield curve, with the market now pricing two rate cuts, one in September and another in December.

Earnings season starts today with the banks reporting. The expectation is for choppy trading and high volatility as the market reprices based not only on earnings but forward guidance. If you are holding for the long run, there is no need to panic sell even if the guidance is somewhat gloomy. Based on the current FED funds rate, the Fed has plenty of options to address growth concerns. The best case would be for the Fed to pivot from the current high inflation high interest rate policy to one where they cut rates at every FOMC to stimulate demand.

 

[jacky5297]

Not quite though.

I lump sum in on 2022 and I checked. If I had dca small sums in 2022 vs lump sum in, the dca has lesser profits as compared to lump sum as it had been on an uptrend since 2022 though.

Statistically lump sum is better than DCA, for sure. Realistically, it is always hindsight 20/20, no one can predict when is the start of uptrend or downtrend.

You are lucky to lump sum at the start of bull market in 2022, many who sit on the sideline with 100% cash continue to stare and wait for the dip.

 

[hyperfuse]

Statistically lump sum is better than DCA, for sure. Realistically, it is always hindsight 20/20, no one can predict when is the start of uptrend or downtrend.

You are lucky to lump sum at the start of bull market in 2022, many who sit on the sideline with 100% cash continue to stare and wait for the dip.

Not really. When I lump sum in, cspx was price at 438usd. Thereafter it drop and drop to 380usd. I didn't bother as I know the purpose of investing in s&p 500 is for the long term. It was negative for about 6 to 10 months. I also didn't bother.

Then right now it's at about 594usd.

 

[highsulphur]

Not really. When I lump sum in, cspx was price at 438usd. Thereafter it drop and drop to 380usd. I didn't bother as I know the purpose of investing in s&p 500 is for the long term. It was negative for about 6 to 10 months. I also didn't bother.

Then right now it's at about 594usd.

yeah. 2022 thru early 2023 was one of the toughest year for any long term investors who kept seeing their portfolio declining. However they were rewarded sharply by staying invested when the market turned sharply end 2023 which no one could have predicted (hence get in in time).

 

[wutawa]

yeah. 2022 thru early 2023 was one of the toughest year for any long term investors who kept seeing their portfolio declining. However they were rewarded sharply by staying invested when the market turned sharply end 2023 which no one could have predicted (hence get in in time).

my portfolio in 2022 was worse than s&p

 

[d9_lives]

yeah. 2022 thru early 2023 was one of the toughest year for any long term investors who kept seeing their portfolio declining. However they were rewarded sharply by staying invested when the market turned sharply end 2023 which no one could have predicted (hence get in in time).

I find it easier. Things were so cheap so I didn't think too much, ALL IN.
Bought the dip, another dip, more dips, bigger dips, mother of all dips lol....

Today, it's way more difficult. 10k can't even get you a lot of nvidia.

Anyway, you can't be a champ if you're so afraid of getting punched in the face.
Those people who're indecisive, paralyzed by fear are....so mediocre

 

[aurvandil]

Monday 15 Jul 24

Strange end to last week. On Thursday, the market sold off sharply on CPI data indicating the US had crossed over into deflation, sparking concerns of a hard landing for the US economy. The sell-off was fierce and rotational with movement from tech to "safer" sectors that had not run up in the recent rally.

On Friday, PPI data came in hotter than expected, triggering an immediate sell-off. However, this quickly reversed as traders realized the hotter print suggested growth might not be as weak as previously thought. The negative PPI paradoxically sparked a rally, pushing the market to a new ATH of 5708.25 before coming off sharply to the halfback at 5664.25.

This occurred against the backdrop of massive movements in the Treasuries market. Fed funds futures are now pricing in three rate cuts for this year. The narrative is that the Fed will make a major announcement at the upcoming Jackson Hole meeting in August, kick-starting a rate-cutting campaign. It is anticipated that the Fed will cut aggressively before the US falls into a serious recession and has a surge in unemployment.

Over the weekend, there was the dramatic assassination attempt on Trump. There is a lot of retail chatter about the impact of the assassination attempt given that it might significantly influence the election. So far, this has been a non-event for the market, which appears indifferent to the outcome of who wins.

 

[aurvandil]

Tuesday 16 Jul 24

The market extended the ATH to 5718.75 before pulling back to the halfback and making a sharp excess low. Price action remains incredibly bullish with no signs of weakening.

Powell made another appearance, reiterating his message that the Fed is about to pivot and start cutting rates. The market has now firmly priced in three cuts for 2024 before the Fed takes a pause at the January 2025 FOMC. The expectation is for the new policy to be formally announced at the upcoming Jackson Hole symposium.

Of note is that the VIX has moved up to 13.12. This is expected, as there are a lot of nervous bulls engaging in heavy put buying to hedge in case the Mag 7 + + Nvida disappoint. Under normal circumstances, such heavy put buying would send the market lower. However, the Fed pivot has generated so much buying pressure that the market has continued to move up despite the hedging.

The first set of significant tech earnings comes from ASML on Wednesday, followed by TSMC and Netflix on Thursday. The banks that reported have started the season on a positive note. Expectation is for favorable news from the tech front to generate further upward movement. The 5700 level has been breached, and we are currently moving back and forth to clean up the structure and build a base. The next key level to watch above is 5750.

 

[aurvandil]

Thursday 18 Jul 24

The market experienced a sell-off yesterday after setting successive all-time highs, establishing a secure short-term top at 5721.25. This pullback moved the market past the 5671.25 halfback, returning to levels seen prior to last Thursday’s weaker-than-expected CPI data. While a short-term bottom seems to be forming, this bottom is not yet secure.

Looking ahead, key earnings are on deck with TSMC and Netflix today, followed by Microsoft, Google, and Tesla on the following Wednesday. ASML's strong results yesterday are a positive signal for the tech sector, as ASML often serves as a reliable leading indicator of how the sector will perform as a whole. Expectation is for a rotation back into tech if the rest of the sector has results similar to ASML.

We are currently at a point of maximum anxiety as reflected by the VIX. There will be some clarity by Wednesday as more than half of the Mag 7 will have reported in. Until then, it's best to chill and relax. Also best to tune out all the noise around the US Presidential elections.

 

[aurvandil]

Friday 19 Jul 24

The sell-off persisted yesterday, with the market breaching 4600. Unlike previous declines, this was not rotational—9 out 11 sectors of the S&P registered losses.

Both ASML and TSMC delivered better-than-expected earnings, and Netflix also beat estimates but issued gloomy guidance. This has raised concerns that other Mag 7 might similarly beat expectations but offer cautious guidance. This reinforces the narrative that the Fed over-tightened and started the rate cut cycle too late.

Politically, this weekend is expected to be significant. There is speculation about President Biden potentially withdrawing from the race. The key question is whether he’ll resign and hand over to Vice President Harris or serve out his term and allow an open convention to pick the Democrat nominee. While these events do not have a lasting impact on the market, they can trigger knee-jerk reactions. It is best to stay calm and ignore the noise. The worst thing you can do is become an overnight political expert and start managing positions based on your perception of how the election is going.

Looking ahead, it is uncertain if the market has found a bottom. Today marks the end of the week, and sharp, unexpected moves often see some retracement. However, this does not mean the downtrend has ended, and further declines could occur when the market reopens next week. In managing positions when you are on the wrong side of the trade, the key is to prepare yourself mentally for the market to continue to move against you.

 

[aurvandil]

If Biden steps aside, is that positive or negative with regards to immediate impact for markets?

Hard to say. Given that it might happen over the weekend, most will want to hedge against any down move when the market is closed.

Confounding factor at the moment is the Crowdstrike / Microsoft outage.
Market appears to be reacting in case tonight got any major US exchange go down.

Should brace for a rough night and then perhaps a violent move back up when everything is sorted.

 

[jinsatkilife]

Hard to say. Given that it might happen over the weekend, most will want to hedge against any down move when the market is closed.

Confounding factor at the moment is the Crowdstrike / Microsoft outage.
Market appears to be reacting in case tonight got any major US exchange go down.

Should brace for a rough night and then perhaps a violent move back up when everything is sorted.

ops, looks like it happened: biden dropped out

lets see how futures open

i predict its a reversal of trump trade, which means buy NVDA and all chips