July 26, 2024

Markets:

Stock futures rose on Friday morning as the major averages head for weekly losses and investors anticipated a reading of the Federal Reserve’s preferred inflation gauge.

In after-hours trading, medical device maker Dexcom plunged about 38% after releasing disappointing fiscal full-year guidance. Footwear company Deckers reported fiscal first-quarter earnings and revenue that exceeded analysts’ expectations, boosting shares by roughly 10%.

Stocks are poised to end the week with declines, as investors on Thursday added to the previous session’s steep losses by dumping some megacap tech and artificial intelligence-tied stocks. The activity seemed to be part of a broader rotation into small caps and more cyclical areas of the market.

On Friday at 8:30 a.m. ET, traders will watch for June’s personal consumption expenditures report, an inflation reading that’s preferred by central bank policymakers. On a monthly basis, headline PCE is expected to have grown by 0.1% and by 2.5% from 12 months earlier, according to economists polled by Dow Jones. The final Michigan sentiment survey will be released at 10 a.m.

Portfolio:

Violent week for the markets and although weeks like this are hard to accept, it's needed for the markets at times to build a greater road for us.  We managed to add a few trades for August and technically, it does fit into building the technical narrative for Q4.  Since the bullish trend is still intact there is no reason yet to believe that this is a cycle change in the market. The previous drawdown in mid April 2024 lasted 20 trading days, drawing down -8.07% in that time. Creating a tradeable bottom on April 19th. The market went on to rally +20%  Now fast forward to now. We put in a "top" July 10th and in the past 11 trading days we have accelerated lower -9.51% in that time. Now retesting late May resistance before the June rally higher. The speed in which this "correction" has occurred is notable too. Most correction around 10% take 16 – 20 trading days.  Risk vs Reward opportunities are highly skewed in a traders favor in these types of environments.  We saw a strong close and now will closely watch today for next levels.  As we stated earlier in the week, we will not rush into this to add.  We want to be patient, ok with paper cuts, before we attack the opportunity that will be in front of us. The rallies we have seen off these levels have created outstanding returns, we just patiently wait now.  Let's see what happens with PCE and earnings next week!  No changes needed in current holdings of S, TSLL, and GBTC here.