Weekend Market Outlook (August 4): Trade Setups & Changing Dynamics

In this version of our weekend market outlook we will cover yet another busy week of market action, trade setups, and changing dynamics for traders.

Below is a summary of what’s in the video below. Please feel free to comment or hit us up with any questions.

–  After weakness from late last week into early this week, stocks got a boost and changed sentiment at the end of the week.

–  Market Forecast study shows an overbought cluster. I discuss how a cluster is formed and why this particular cluster is actually a good sign for stocks.

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–  Seasonality review for the S&P 500 (NYSEARCA: SPY) heading into a key period in mid-August.

–  Improved Market Forecast charts for NASDAQ (NASDAQ: QQQ) and Russell 2000 (NYSEARCA: IWM) after both indexes held key support levels this week. Russell 2000 has been in an extended consolidation after double-digit 3-month returns.

–  Supporting technical charts validate the bullish posture but volatility finished the week near extreme lows.

–  Two biggest news items today were jobs and tariffs -neither had a negative impact on U.S. stocks relative to foreign markets.

–  Discussion of sector rotation with combination of strong dollar and bullish risk appetite.

–  Today’s trade idea highlights a speculative trade on stock in hot sector that has earnings next week. Trade helps to avoid volatility risk and keeps risk small compared to profit potential.


Twitter:  @davidsettle42  and  @Market_Scholars

Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.