August 18, 2023

Markets:

Stock futures slipped Friday after the major averages dropped for a third straight day.

The Dow is on pace for its worst week since March, lower by 2.29% through Thursday. Meanwhile, the S&P 500 is headed for a third straight week of losses, a streak that hasn’t happened since February. The Nasdaq Composite is also set for a third consecutive losing week for the first time since December.

Meanwhile, the Dow Transports and Russell 2000 are each on pace for their worst weeks since March.

The 10-year U.S. Treasury yield on Thursday rose to its highest level since October 2022. The move came after the July meeting minutes from the Federal Reserve suggested further interest rate hikes could be ahead as central bank policymakers remain concerned about inflation.

Federal Reserve Chairman Jerome Powell will be delivering an address at the central bank’s symposium in Jackson Hole, Wyo., next week.

The Fed announced that Powell will speak Friday, Aug. 25 at 10:05 a.m. ET. He will deliver a speech, but there will be no question-and-answer session afterwards.

Portfolio:

We enter the last trading session of this week holding set-ups in NNDM, HPE, and CVE. Judgement day for the markets today? Love to see this fear being placed but yet the VIX does not move. 4350 monster line of defense here, next would be 4298 – 4290 area for us. Should that break, bears would be in full control regardless of volume here short term. Today not only do we have this fight technically but are also blessed with Powell speaking during this morning. OPEX, Powell, and a technical fight. What a session to end the week. We completely understand that price changes sentiment and we will absolutely respect the move technically with a break / hold of 4350 and dare we break 4290 – then you have yourself a monster opportunity on the short side. This would be the same set-up for us when we patiently waited to get above and hold 3890 on the long side. We went full bull mode and capitalize like no one else. The opportunity is the same still, this is why patience is needed. However, respect what can develop here on the Bull side. It can easily go 300 – 500 points higher on the S&P to close the year. I truly hope folks see that scenario. This would cause the massive chase and would be the ultimate level of the pain trade we spoke of a few months ago. That trade scenario is still alive and well.