September 9, 2024

Markets:

U.S. stock futures jumped Monday as Wall Street tried to recover some of the steep losses suffered last week.

The stock market suffered serious losses to kick off its first trading week of September, a historically tough month for equities. The S&P 500 tumbled 4.3%, registering its worst week since March 2023. The Nasdaq Composite plunged 5.8% for its worst weekly performance since 2022, while the 30-stock Dow dropped 2.9%.

This week, investors will watch out for two key inflation reports that could further inform the Federal Reserve’s decision at its next open market committee meeting. August’s consumer and producer price reports are slated for release on Wednesday and Thursday morning, respectively.

The market has now priced in a 71% chance that the Fed could cut rates by 25 basis points at its next meeting and just a 29% chance of a 50-basis-point rate cut, according to CME Group FedWatch Tool.

Palantir Technologies, Dell Technologies — Shares of Palantir and Dell jumped 8% and 5%, respectively, after the announcement post market Friday that the companies would join the S&P 500 index.

Portfolio:

We enter the new trading week holding set-ups in NIO, ASTS, ADMA, and TSLL. So, once again, the unexpected is happening here. VIX was elevated into the close and most were calling for a potential sharp drop to start the week before recovering and using that as an entry point. Instead, we are looking at pretty strong premarket activity. Now, could it just be a lame bounce attempt short term, possible, however as we continue to state this market continues to suck bears in before ripping them apart. Higher lows continue to be printed. I could see a range between 536 to 547 on SPY until we have the Fed rate decision. In fact, I would be willing to bet that this is exactly where we sit until the Fed meeting. And that's completely ok! It allows the trend to build. Keep in mind, since mid-July of this year the market has been a very difficult environment for a variety of trading strategies. This has surely frustrated many traders. We had a pretty strong August but cannot stress enough that once we break from this period, we are in such a beautiful runway to end 2024.

One of our favorite charts too look at is the QQQ. This one is always on focus for queue's into the market. QQQ is beginning to trade quite close to the 200D SMA. That price point sits slightly above $440. Please keep this in mind. This could be a catapult area. Would it surprise anyone this prints and runs right around the Fed meeting? If the market reacts positively off of this level it could set up a snap back rally and a potential higher low from the $423.45 low made earlier in August. Now, for the Bears, if a new "higher low" was made but quickly failed, August lows would be back in play. A much more bearish scenario, especially if the market failed through that August low. There is absolutely no reason to be bearish beyond the 200 unless it breaks and holds, and we test the August lows. Cannot be any more straight forward tan that and we hope this helps you with your own trading plan as well. Just keep a close eye on the QQQ's and SPY levels we provided.

Be ready, stay patient, we are almost through this period and the runway begins.