August 5, 2024

Markets:

U.S. stock futures fell early Monday, following a volatile week for Wall Street, in which the Nasdaq Composite dropped into correction territory.

Wall Street is coming off a brutal week for the major averages. On Friday, the Nasdaq capped a third straight week of losses, bringing the tech-heavy index down more than 10% from a record set last month.

In Asia overnight, Japan stocks confirmed a bear market as Asia-Pacific markets continued the sell-off from last week.

The 12.4% loss on the Nikkei — which saw it close at 31,458.42 — was the worst day for the index since the “Black Monday” of 1987. The loss of 4,451.28 points on the index was also the largest in terms of points in its entire history.

U.S. Treasury yields tumbled as well. The benchmark 10-year note on Friday yielded 3.79%, down from where it was one week previously at 4.20%.

Investors may glean some insight into how the Fed may proceed with interest rates in the coming week. San Francisco Fed President Mary Daly will be speaking at the Hawaii Executive Collaborative after the close Monday.

Portfolio:

So many headlines, so many possible causes right now for today's move but we think this is mainly all due to the implosion of the carry trade with Japan. Keep in mind where we are based on where the markets were in June. Keep everything in perspective here. Do not get carried away and overreact to this move. I cannot stress that enough, too many times people get carried away and a few days it's a completely different picture. NQ at one point was +500 off the lows about 90 minutes ago. Expect wild swings here. Soon, it will be time to be greedy when others are fearful. As we stated Friday, S&P under 5300 has our attention. But we have a gap below and we move the line now. Watching 5220 level – 5200. Want to see who steps in and the lots we see before we decide if this was final capitulation for short term and we move higher or if this is the start of a lower move before we move higher in a few months.

 

Only two positions open and We can position ourselves either way.  We do want to adjust our stop on TSLL to 7.50 and SOXL to 21.25.   Be ready today but remain super patient.