OVERVIEW
This Will Be An Interesting Week

The Jackson Hole Economic Symposium, starting this Friday, is a big deal in the financial world. It’s where top central bankers, economists, and financial experts come together to talk about the economy and what might happen next.

Federal Reserve Chair Jerome Powell will give a speech that everyone’s watching closely this year. Normally, these speeches don’t shake up the stock market much unless there’s a major change in the works — which could be the case now. Since 2000, the S&P 500 has typically gone up by about 0.4% in the week after the event.

But this year feels different. With inflation starting to cool down and the job market slowing, Powell’s speech could give us important clues about the Fed’s next moves. According to Bill Dudley, a former head of the New York Fed, the Fed Chair will probably hint that the need for tight monetary policy is fading. However, Powell isn’t likely to reveal how big the first rate cut will be, especially with an important jobs report coming out on September 6th, just before the Fed’s next meeting on September 18th.

Traders are confident that the Fed will cut rates at the next meeting, but the size of the cut is still up in the air. With very few Fed officials scheduled to speak in the coming days, Powell’s comments this Friday carry even more weight. That’s why options traders are anticipating a big move in the S&P 500, with the market pricing in a swing of over 1% in either direction, according to Citigroup.

Nasdaq

From a strictly technical standpoint, the Nasdaq looks very strong right now. The QQQ has been on an upward surge since it touched the weekly 20-EMA on August 5th, allowing it to surpass its daily 200-EMA and make a surprisingly sharp recovery.

However, this short-term uptrend, impressive as it is, is approaching a significant supply zone that stalled the QQQ’s advance on Friday. If you look at the visible range volume profile (VRVP) on the right side of the chart, which shows volume at various price levels, you'll see that the QQQ easily moved through the low-volume range between $463 and $475. It’s now starting to slow down as it nears the point of control (POC) at $482. This POC area and the zone between $475 and $482 are key resistance levels.

It wouldn’t be surprising to see the QQQ consolidate sideways for a bit either before the test of the POC, or now just before as to allow time for the market to digest the recent gains.

This is a normal part of the market cycle and shouldn't be cause for concern. We are still very clearly in a strong uptrend and in the early stages of a bull cycle, so there will be plenty opportunity ahead.

S&P Midcap 400

On Friday, the MDY experienced an inside day, allowing the market to digest the significant breakout gap from earlier in the week. This consolidation is actually a good sign. It shows that the strong buying interest and bullish momentum behind the initial gap are holding, and the market is stabilizing at these higher levels. Both buyers and sellers appear comfortable trading at this price, reinforcing the strength of the breakout.

Technically, we’re seeing the early stages of a “golden cross,” where the daily 10-EMA is crossing above the 20-EMA. This pattern often signals the beginning of a new uptrend.

It’s important to watch for continued demand, even if the index trades sideways for a day or two. The visible range volume profile (VRVP) indicates a significant gap below. If the MDY fails to hold its ground, there could be a retracement that might push the index down to around $542.

However, we consider this scenario highly unlikely at this moment.

Russell 2000

The small caps still have potential to rally another 1.3% before hitting significant resistance, which is indicated by the next dense volume zone around $217 on the VRVP.

The IWM is actually looking more promising compared to its larger counterparts, despite Friday’s notable rejection at $214, which was the most pronounced among the QQQ and MDY.

Our optimism stems from the IWM’s proximity to its key EMAs, suggesting it's not overly extended, and from the fact that there's an overhead gap still to be filled. Additionally, as we discussed on Friday, the prevailing outlook of lower interest rates and reduced borrowing costs benefits small-cap stocks.

With lower debt costs, larger institutions are more likely to seek to accumulate shares in higher-risk growth assets, which tend to perform well in a favorable economic environment.

DAILY FOCUS
Push Forward With Confidence

We’re currently in a strong growth phase—everything is aligning perfectly. If you're part of our Pro team, you would have received detailed insights in yesterday’s report, which you can access here. This report covered where institutional money is flowing and highlighted several areas set to break out this week.

Now is the time to be proactive. Ensure you’re heavily invested in a solid portfolio of growth stocks. There are still several stocks that haven’t yet surged, and we’ll be looking for entry points today.

It’s crucial to understand that missing this opportunity to enter could severely limit your profits from this bull cycle. As swing traders, if you don’t enter early in the uptrend, you risk missing out on significant gains and increasing the likelihood of getting stopped out by entering later, during secondary or tertiary setups in a stage 2 uptrend as you are buying later in the cycle.

Stock Of The Day
A Major Earnings Episodic Pivot

ZIM: ZIM Integrated Shipping Services, LTD

• ZIM reported earnings earlier today, delivering a substantial beat with earnings up 61% and revenue surpassing expectations by 9%.

• The stock was already looking strong with its multi-month base and robust relative and absolute momentum. Although ZIM’s fundamentals have been somewhat weak, today’s impressive earnings report suggests the stock may be undervalued.

• With guidance now being raised, ZIM is likely to see a rally following today’s earnings release. As usual, we will look to enter on the 5-minute opening range high.

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