Major market indexes gyrated through a volatile weak as a nasty sell-off on Thursday produced outside reversals lower in all the indexes save for the NASDAQ Composite which found marginal intraday support at its 20-dema. On Friday, a gap-up open sent the indexes into immediate recovery mode as they all quickly regained their 10-day moving averages and closed above the line and near recent highs.
As we surmised might occur per our Focus List Review report of last weekend, Bitcoin ($BTCUSD) made a break for its 50-day moving average, where it ended the week. The short entry along the 20-dema has now succeeded and it remains to be seen whether $BTCUSD can now hold 50-dma support. If that is breached, then a fresh short-sale entry would be triggered at that point. We find the ProShares Short Bitcoin Strategy ETF (BITI) as a useful inversely-correlated vehicle for shorting $BTCUSD.
It was also a rough week for precious metals, despite both gold and silver posting pocket pivot moves through their 10-day moving averages on Wednesday as volume picked up significantly, generally a bullish sign. That was not to be as both metals then broke to the downside with the VanEck Merk Gold Trust (OUNZ) breaking below the 50-day line and the Aberdeen Physical Silver Trust (SIVR) busting its 20-dema as it looks marginally better on its chart as it still remains above support at the 50-day moving average.Alphabet (GOOGL), Meta Platforms (META), and Microsoft (MSFT), three of the so-called Magnificent Seven stocks that have accounted for just about all of the NASDAQ's performance in 2023, all reported earnings this past week. GOOGL gapped higher in a buyable gap-up move using the 128.23 intraday low of Wednesday as a selling guide. META gapped higher on Thursday and closed near the intraday lows. It gapped up slightly on Friday to close at higher highs for the week.
Technically, Thursday's BGU remains in force using the 309.84, about 4% below Friday's close, as a selling guide. MSFT played out as a shortable gap-down move on Wednesday after earnings as it also broke below the 20-dema, triggering another short-sale entry at that point. It is now attempting to hold 50-dma support, but any break below the 50-day line would trigger a fresh short-sale entry using the 50-day line as a covering guide.
Big-stock AI meme leader Nvidia (NVDA) continues to hold up after posting a pocket pivot breakout two weeks ago. While volume was only about average that day, it was a enough for a pocket pivot volume signature, which can substitute for heavy buying volume on a base breakout. For now pullbacks to the 20-dema would constitute potentially lower-risk long entry opportunities as long as NVDA does not violate the 20-dema based on the Seven-Week Rule discussed in the book Trade Like an O'Neil Disciple.
MongoDB (MDB) continues to falter after a recent failed breakout two weeks ago. It has spent the past three days back below the 10-day moving which for now has been shortable resistance. Any break below the 20-dema would trigger another short-sale entry using the 20-day line as a covering guide. MDB is not expected to report earnings until August 31.
The Market Direction Model (MDM) remains on a BUY signal.