Hello and welcome to another issue of 🕵 The Seeker 🕵
“Don’t fight the tape” - Martin Zweig
1) Big moves drawing attention from the last three trading days
In a world where value investors have gotten their wrists slapped continuously trying to follow breakout stories, the best trades have come from the idea of future growth and the advent of a new cycle. One such ticker that’s leading is ACCD 0.00%↑. A renewed move over 50 on the rsi could bring about a test of the upward bonus of it’s channel as visualized on one the daily chart.
Another industrial name that continues to outperform is ITT 0.00%↑. It ended the week at an all-time high, closing strongly to end the week. Such a big move however will probably require a little consolidation, but the odds remain strong for demand outpacing supply.
Another name experiencing goldilocks conditions is SITE 0.00%↑. With the labor situation easing this company could be a prime beneficiary.
Next with school children returning to classes, this marks the end of summer, and potentially also the end of consolidation for Yeti. YETI 0.00%↑ Friday broke out to a high for the year with a move into the $60’s looking fully possible.
2) Sector Performance
Friday’s action was muted with low volume across the averages. Investors however remained in a positive tone following the release of jobs data giving further possibility of an end of this current rate hikening cycle after the September meeting of the Federal Reserve board of governors. New investor flows ahead of the Labor Day holiday were also to be expected.
Going back over the week, bullishness won out, with Technology topping all sectors and closing with it’s best broad weekly performance since before the July/August swoon.
Causing the optimism in Energy is the tightness of crude supply. On Friday WTI closed the week breaking above it’s range for the last 9 months with many speculators piling in and possibly more momentum to follow.
Eyes however will remain sharply on semiconductors. With the dollar also remaining above and beyond the strongest liquid currency, semiconductors as a commodity might get their mettle tested. If, and this is a big if… If the industry were to hit a weak patch, it would probably reveal itself at a failed high below an overbought rsi. That is where SMH 0.00%↑ currently stand with a 60 reading… 😎 observe attentively.
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3) Sentiment
(Note: earnings watch to resume once quarterly season begins again in October)
Similar to semiconductors, CNN’s Fear and Greed index recently touched 50 as is moving higher again. A general rule of thumb is that is, or similar measures, need to dabble in a more fearful state first before to establish a more meaningful base. A move above 60 will give a nice signal about the near-term future.
In a similar way, the VIX 30-day index option barometer, is also saying that the stocks of the S&P500 are a safe place to keep your investments, or known as complacency in other parts of the trading universe.
4) The week ahead
From Barrons:
The Calendar
U.S. stock and bond markets will be closed on Monday for Labor Day. Investors will return from the long weekend to a busy week of corporate earnings reports and analyst meetings, plus the latest U.S. economic data.
Zscaler and Gitlab will report on Tuesday, followed by Kroger on Friday. Companies hosting investor days next week will include Danaher and Intuit on Wednesday and First Solar on Thursday.
The economic-data highlight of the week will be the Institute for Supply Management'sServices Purchasing Managers’ Index for August on Wednesday. That's expected to come in roughly even with July's reading and remain in expansionary territory. Also on Wednesday, the Federal Reserve will release its beige book report on current economic conditions across the U.S.
Other data out next week will include the Department of Labor's initial jobless claims on Thursday and the Fed's household net worth statistics on Friday.
--Nicholas Jasinksi
5) Wisdom of Crowds
6) Macro conditions
Weekly risk signals are based on intermediate and long-term market trends, as well as the flow of money into or away from asset classes. Not included are potential fundamental or gamma implied volatility tail risks.
Note: top traders themselves have a hit rate approaching the 50% lower bound. Controlling risk on losing positions and letting winners prosper is for many the difference in creating a successful track record over time.
With the market remaining in an otherwise speculatory risk-on state, the weakness in Bitcoin remains a wonder. Could it be spill-over from the weak Chinese housing market, dollar illiquidity, or something else that this may be a harbinger of? At this moment trading below it’s flattening 200ma, an impending takeout by the 50day moving average, and divergence with gold, there isn’t much to get “seemingly” positive about.
It should be pointed out however that this week, we had potential earth shattering news, so it’s not unthinkable that it might be from the next rebound AFTER intermittent selling pressure is the real one that gets talked about around the Thanksgiving Day table in the months to come. Only time and price will tell us the answer.
😎 Cheers! 😎
Disclaimer: Please note that the information provided in this article is for general informational purposes only and does not constitute financial, legal, or professional advice. The information provided should not be relied upon as a substitute for financial, legal, or professional advice. Before making any decision, it is important to consider all relevant information and consult with a professional who can provide personalized advice based on your specific circumstances. The author and publisher of this article cannot be held liable for any actions taken based on the information provided. This is not a recommendation to buy or sell any specific securities or financial instruments.