Quick market review on 25082022 market close ( with semiconductor review )
What a week it has been, period between Option expiration and post options expiration week ( options expiration date 19 Aug 2022 ), are typically volatile, and, SPX has corrected from 4320 to 4120, down around 4.5%; while NDX has corrected from 13720 down to 12850, down around 6%
SPX
<S&P 500 chart>
After falling to 4120, seems to be holding 4100 support level seems to be holding. And there’s morning star candle stick forming, and it has close back above 20MA, an encouraging sign, again it all depends on how market react to fed chair Powell speech later in Jackson Hole conference at 10am ET. If market digest the speech and rally further, I think the 4120 could mark another bottom and go higher subsequently.
NDX
<Nasdaq 100 chart>
After falling to 13820, seems to be holding 13800 support level seems to be holding. And there’s morning star candle stick forming, it has yet to close back above 20MA, if it close above, that is 1 more encouraging sign, again it all depends on how market react to Fed chair Powell speech later in Jackson Hole conference at 10am ET.
SOXX ( iShares semiconductor ETF )
< iShares semiconductor ETF >
There’s a head and shoulders forming, if it breaks above the consolidation/accumulation box, and go higher, this will be a very conclusive evidence that the market bull has started. So far SPX and NDX recovery attempt has been going on without serious participation from Semiconductor because it’s been lagging the overall market, imagine the bullishness of the market if semiconductor rally is adding to the market strength.
Semiconductor is a very volatile and demand( & supply) sensitive sector, we are right in the middle a recession without a doubt ( inventory building up, semiconductor crashing, and 2 quarters negative growth, various manufacturing indicators/survey/PMI slowing down significantly ). A lot of bad news have been baked in by the market.
<Nvidia>
Just a side note, Nvidia has been releasing extremely bad news recently, look at market response after the release of those bad news, most recent 2 times, market gap down and recover backup subsequently, and it’s also currently showing Head and shoulders pattern.
The scenarios that can make me scrap my market bottom and start of market bull outlook, are
1)SPX losing 3800 support level
2)fed chair Powell signal a much tighter rate hike path beyond September, and market price in even higher& faster rate hike in November and December rate meeting.
( these 2 scenarios probability are low, but market could smack me in the face and prove me wrong tonight even though the probability is low )
Barring these outlier scenarios, happy buying/trading/accumulating for the days ahead. There could be some potential pitfall in September weakness period ( I will write about in times to come )
Stay tune for my update again in the next few days. ( and I still owe everyone a market bottom part 4 entry, it will come after 1 more market review update maybe around next week)
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