SGT Chart Book
Last week’s highlights:
Fed chair Powell says “Fed to move carefully on rates”.
The main points:
The Fed is prepared to raise rates further. The inflation target is still 2%, and lowering inflation will require a softer labor market. Rate hikes have not been fully seen in the economy, so the Fed will proceed with caution and obverse the data.
The AI story is still alive, and many participants believe this is just the start of profitability in the sector, while others question whether the AI-powered rally is still alive.
The release of second quarter earnings topped expectations and fueled a sharp rally in after-hours trading on Wednesday - see chart below.
The chart shows the distribution of monthly returns since 1928.
Is September going to continue to be the losing month in 2023?
Dow 30 (USA30)
The Dow traded lower for most of the week with a test of the up-trend line support that we suggested would offer as first downside target, there looks like initial rejection after a whippy day Friday post Powell’s speech.
The magnificent 7: AAPL, AMZN, MSFT, META, NVDA, GOOGL, TSLA stocks are up 93% in 2023. The repeated story about concentration shows the market cap as a % of the SP500 is 28% of total. There is a potential head and shoulders setup with neckline coming in around 4325 level.
Spike up after earnings release, with a stock closing down on Friday.
US 10 Year rates
Rates traded above last year’s highs and continue to trace out the up channel.
Defined by the 7 months up channel, there should be good demand in the 1.0750s.
As we suggested last week, Silver was approaching good trendline support, we have seen a good bounce of these levels.
A quiet week after the sell off and test of the very strong support zone.
Until next week, 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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