SGT Chart Book

sgt_chartbook

The main themes from last week for anyone who missed out.

  • A drop in US Bond prices after the Fitch rating agency downgraded the US credit rating from AAA to AA+, sending yields to their highest level since November 2022. The 10-Year approached 4.20% (see chart below).
  • On Friday, the US Labor department announced that US employers added 187,000 jobs in July 2023. While still a strong number, it does represent a slowdown on the hiring side.
  • Two stocks with very different movements on Friday after quarterly data releases - Apple, the first company to top $3 trillion in value, suffered a 4.8% move lower after disappointing results, with a 3rd quarter decline in revenue, marking the longest decline since 2016. On the other hand, Amazon was up on Friday 8.3% after higher-than-expected quarterly profits (See charts below).
  • Traditionally, September is the weakest month for stocks; with the SP 500 losing an average of 1.1% since 1929. The 3 major US indices are well up for 2023 so far. Could we have seen the start of a consolidation or a sell off before the bulls reemerge?

Apple

A steep upward trend line has been broken, while technically not good, you can never rule out Apple. We have seen the stock rally up from the $120s to $190s (new highs) with very little pause.

Amazon

A price jump reflects the quarterly data release on Friday 4th, beating expectations.

SP500

After testing the top side on a daily upsloping channel, prices are starting to pullback.

DOW

We have used a daily close chart to remove a lot of the intra-day volatility, after highlighting the bearish divergencies last week. We are seeing the downside movement toward the support zones - still some way off, but these look like sensible targets for a reassessment of longer-term direction.

US10-YEAR

The chart illustrates the jump up in yields after the Fitch downgrade.

Dollar Index

After breaking below the double low (blue horizontal line), the US$ index has worked its way higher, with trendline support shown in the chart below.

EURUSD

After peaking in the 1.12s we have seen a series of lower highs, and trendline resistance was tested last week around the 1.1050 area.

GBPUSD

A well-defined channel was broken to the downside only to gyrate higher later in the week after economic releases. Resistance can be seen on the chart around the down trendline.

GOLD

After the suggestion that Gold had put in a clear 5-wave up move, we have seen a more consolidative tone and currently retraced 38.2% of the entire up leg so far. While longer term charts are still constructive, we watch the shorter term for trading ideas.

VIX

May be significant that the index has started to move back up, think a break back above the horizontal line would be first key that something is going on.

BTC

More of the same. Consolidation and lackluster trading activity.

Happy trading,
SGT Trade Desk

Disclaimer: Trading Desk Observations are not trade recommendations. The purpose of these charts is to bring to your attention potential chart patterns you may wish to monitor.

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