August 9, 2023

Markets:

U.S. stock futures were higher Wednesday as Wall Street tried to regain its footing following a decline in the previous session.

Stocks struggled Tuesday. The Dow closed 158.64 points lower, or 0.45%. Still, that’s better than where the Dow was at session lows when it declined about 465 points. Meanwhile, the S&P 500 fell by 0.42%, and the Nasdaq Composite slid 0.79%.

The losses came after Moody’s downgrade of several regional banks dampened investor sentiment. Some market participants were concerned the signal could spell more trouble for markets ahead, but others say the pullback is expected given the extraordinary rally in equities this year.

China’s consumer price index fell for the first time in over two years, posting a 0.3% year-on-year drop in July, but rose 0.2% month-on-month.

The unemployment rate in South Korea climbed to 2.7% in July, up from 2.6% the previous month, but down 0.2 percentage points compared to the same period last year.

Portfolio:

We enter the new trading session holding positions in EZGO, HPE, TSLL, CVE, IOT, IQ, and KEY.  Key today and the next few sessions is to watch for constructive price action off yesterdays lows.  Build and go.  Right now, algo's are super crowded.  This is not retail trade driving price but mainly algo's as volume seems so light thus far in August.  Low volume has historically been an issue in August until after Labor Day.  History has shown us one thing; short term lows print in August – which arguably could have printed already – then rally, fade it a bit, then rally again into November.  This has been the historical print and would not surprise us at all.  We see major accounts being followed on social media crushed this year with constantly chasing the short side this year.  Remember the pain trade; higher!  Can see the next level of the pain trade developing here.  Suck them in on the short side and then rally it with short term fades.  Watching for this to materialize now.  Let's have a great session.