OVERVIEW
Calm Amongst The Storm

US stock futures showed little movement following an assassination attempt on former President Donald Trump on Saturday. Trump survived the incident, which appears to have left the markets largely undisturbed.

Dow futures increased by 65 points, or 0.2%, while S&P 500 futures edged up by 0.1%, and Nasdaq Composite futures remained unchanged.

The former president was shot in the ear during a rally in Butler, Pennsylvania, in what the FBI described as an assassination attempt. The Trump campaign reported that he is "fine" after the incident. The shooter was killed, and one attendee also lost their life. Additionally, two spectators were critically injured.

President Joe Biden condemned the violence and stated that he spoke with Trump after the shooting.

The Republican National Convention is set to begin Monday in Milwaukee, where Trump is expected to be officially nominated as the GOP candidate for the 2024 presidential election. He is also anticipated to announce his running mate during the convention.

Despite the potentially destabilizing event, the market remained calm, suggesting that investors still see Trump as the frontrunner for the presidency. A Trump victory in November could mean the continuation or expansion of tax cuts and increased tariffs. Last month, during a CNN-hosted presidential debate, Trump reiterated his plan to impose a 10% tariff on all imports, which could potentially raise inflation and impact interest rate cuts.

Morgan Stanley's research indicates that expanding the 2017 tax cuts would significantly increase deficits, potentially strengthening the already high US dollar but exacerbating America's inflation crisis, which has shown signs of easing.

Monday marks the start of an important earnings week, with reports expected from Goldman Sachs (GS) and BlackRock (BLK). Early Monday, US stock futures were gaining momentum following the attempt on Trump's life. Dow Jones Industrial Average futures rose by 220 points, or 0.6%, S&P 500 futures increased by 0.4%, and Nasdaq futures climbed by 0.5%. All three indexes had risen on Friday as well.

“The shooting at former U.S. President Trump’s election rally during the weekend has provoked only a limited market reaction,” noted UBS strategist Paul Donovan.

Additionally, signs that the Federal Reserve may lower interest rates as soon as September could be giving stocks a boost. Bond yields were mixed early Monday, with the benchmark 10-year U.S. Treasury bond yield at 4.215%, up from 4.186% on Friday, while the yield on the 2-year note was at 4.453%, down from 4.531% at the end of last week.

Nasdaq

The QQQ experienced a modest rebound on Friday after its significant drop on Thursday. The ETF consolidated on its daily 10 EMA once again, suggesting a potential stabilization point. Increased buying volume was observed, indicating renewed interest and confidence in the tech-heavy ETF. By the end of the trading day, QQQ closed at $494.82, which might hint at a temporary support level forming at the 10 EMA.

This bounce back and consolidation could signal that investors are cautiously optimistic about the tech sector's resilience. The increased buying volume is a positive indicator, suggesting that market participants are willing to buy the dip, potentially anticipating a further recovery. However, it will be crucial to monitor whether the QQQ can sustain this level and break above the 10 EMA in the coming days, especially with any upcoming economic data or Federal Reserve announcements that might influence market sentiment.

S&P Midcap 400

The midcaps continued their upward momentum, with MDY closing at an impressive $552.22. This performance highlights a strong bullish trend as MDY remains well above all of its daily EMAs. The consistent movement above these key indicators suggests robust investor confidence and ongoing demand in the midcap sector.

This trend underscores the shift towards midcaps, which are gaining favour amid current market conditions. The sustained performance above the daily EMAs indicates a solid support base and potential for further growth. Investors appear to be optimistic about the midcap sector's prospects, possibly anticipating favourable economic developments or sector-specific strengths that could drive continued gains.

Russell 2000

The small caps experienced an impressive breakout from their volatility contraction pattern, with IWM closing at $213.14 on Friday. This significant move indicates strong investor interest and momentum in the small-cap sector. Volume remains robust, reinforcing the bullish sentiment as IWM trends well above all of its daily EMAs.

This breakout and sustained high volume suggest that small caps are attracting considerable attention from investors. The strong performance above the daily EMAs signals solid support and the potential for continued upward movement.

DAILY FOCUS
Ready For Action

We are actively searching for valid setups to increase our exposure today. Despite the shocking news about Trump, the market has remained calm, indicating a resilient investor sentiment. If we identify any strong setups, we will look to add exposure accordingly.

Additionally, Jerome Powell is speaking again today, three hours after the market opens. We will closely monitor his remarks and observe how the market reacts. His comments could provide further insights into the Federal Reserve's stance on interest rates and economic policy, which might influence our trading decisions.

WATCHLIST
Only a Matter of Time

GCT: GigaCloud Technology Inc

• GigaCloud Technology Inc. provides an end-to-end global e-commerce solution for large parcel merchandise, including furniture, home appliances, and fitness equipment.

• It has been forming a volatility contraction pattern for several months, indicating a potential build up of buying or selling pressure.

• There was a failed breakout attempt last week, showing that the stock may not have gathered enough momentum yet.

• As the volatility contraction pattern continues to tighten, GCT remains a stock to watch closely for a potential breakout in the coming days/weeks.

We Want To Hear From You
Stay Updated with Intraday Analysis!

Don't let opportunities slip by - whether it's seizing a breakout or recognising a breakdown.

Join us on Twitter by clicking the button below and stay ahead of the market all day long!

We respond to everyone who message us on Twitter!

We are here to help! ✌️