Weak economic data early in the week fed into the "Fed is done" narrative, keeping the market rally alive, but that began to lose momentum heading into Friday's Bureau of Labor Statistics jobs reports. The report showed a print of 187,000 new payrolls vs. expectations of 170,000-175,000 depending on the source. Unemployment ticked up to 3.8% from 3.5% the prior month, partly due to an increase of 736,000 new entrants to the labor force. July's jobs report was revised lower to 157,000 from a previously reported 187,000 jobs. That means that every month in 2023 has seen the jobs reports from the prior month revised downward. As they say, figures never lie, but liars always figure.
The news might have triggered a strong market rally given its weakish tone, but instead the indexes gave up early gains to stall and churn/reverse on lighter trading volume ahead of the long Labor Day holiday weekend. As measured by the NASDAQ Composite, the market corrected about 9%, enough to call it an intermediate correction that is typically 7-10%. Since bottoming over two weeks ago the indexes have regained roughly half to two-thirds of their prior losses off the late July highs on relatively lighter volume. For now it is a matter of gauging how individual stocks are doing, and this is considerably less bullish.
Nvidia (NVDA) remains one of the last viable big-stock AI meme names as it has regained and held a prior base breakout the prior week after reporting earnings. That initial breakout failed at the $500 Century Mark, triggering a short entry per Jesse Livermore's Century Mark Rule for the short side. NVDA then broke lower before testing its 20-dema and has since bounced in a re-breakout move back above the prior highs of the base. It is now coming in on light volume to test the prior breakout point and the 10-day moving average. Depending on how this plays out, it could offer a lower-risk long entry using the 10-dma as a selling guide, or it could continue lower and trigger a later-stage failed-base type of short-sale entry using the 10-dma and/or 20-dema as covering guides.
Fellow big-stock AI semiconductor leader Broadcom (AVGO) reported earnings Thursday after the close and gapped lower on Friday. In the process it triggered a double-top short-sale (DTSS) entry at both the 923.18 (top dotted line) and the 909.86 (middle dotted line) price levels as well as a Century Mark Short-Sale entry at the $900 price level (bottom dotted line). It closed Friday below its 50-day moving average where it technically triggers yet another short-sale entry at the line depending on how it opens up on Tuesday morning when trade resumes.
Other big-stock AI meme names, Alphabet (GOOGL), Meta Platforms (META), and Microsoft (MSFT), are showing mixed action. GOOGL remains above a base breakout from this past Tuesday which technically remains within buying range. Meanwhile, both META and MSFT posted short-sale entries along the undersides of their 50-day moving averages this past week as their charts remain bearish in sharp contrast to GOOGL's bullish action.
Other AI meme names MongoDB (MDB) and The Trade Desk (TTD) remain in compromised chart positions. MDB gapped higher on Friday after reporting earnings Thursday after the close and reversed hard from its intraday highs. It nevertheless held support at the 50-day moving average and technically remains an admittedly ugly and questionable BGU long entry using the 50-dma or the 389.33 Friday intraday low as selling guides. TTD split wide open in the first half of August following a poor earnings report and has since rallied back up to resistance at the 50-dma where it reversed on Friday. That puts it in a short-sale entry position along the 50-day line using the 50-day as a covering guide.
Precious metals have held above recent long entry levels. The VanEck Merk Gold Trust (OUNZ) remains above its U&R of last week along the prior 18.33 low of late June coinciding roughly with the $1900/oz. level in spot gold prices. Meanwhile, silver continues to hold up following last week's bottom-fishing buyable gap-up (BFBGU). However, Friday's 23.16 close in the Aberdeen Physical Silver Trust (SIVR) brings it within less than 1% of the 23.04 intraday low of last week's BFBGU move. It closed one penny above the 10-day moving average on Friday so looks set for a test of the 23.04 BGU intraday low. This could bring it into buying range again using the 23.04 low as a selling guide, but selling volume was heavy on Friday so this remains questionable for now pending the action this coming trading week.
Bitcoin ($BTCUSD) slashed back above its 200-day moving average on Tuesday following news that after a big upside move last Sunday on news that the United States Court of Appeals for the District of Columbia Circuit ruled in favor of Grayscale Investments against the SEC regarding the crypto asset manager’s proposal to convert its flagship bitcoin trust, the Grayscale Bitcoin Trust (GBTC) into a spot bitcoin exchange-traded fund (ETF). That ebullience lasted all of two days before news hit that the U.S. Securities and Exchange Commission (SEC) had delayed until October a decision on all spot bitcoin ETF applications submitted by firms including BlackRock, WisdomTree, Invesco Galaxy, VanEck, and others on Thursday. The SEC is also likely to appeal the decision much as they are appealing the decision made by the courts on Ripple cryptocurrency. That brings $BTCUSD back down into the lows of mid-June in the $25,000-$26,000 price zone. $BTCUSD has had a rough summer after a failed cup-with-handle breakout in mid-July led to an eventual later-stage base-failure that flashed two additional short-sale entries along the 50-day moving average on the way down in early August. $BTCUSD may hold support here as October approaches and an eventual SEC approval of spot Bitcoin ETFs is forthcoming.
The Market Direction Model (MDM) switched to a SELL signal on August 24, 2023 shortly after the open.