The July Consumer Price Index (CPI) calmed market anxieties regarding potential interest rate hikes from the Federal Reserve, with fed fund futures reducing the probability of a September rate hike down to around 40%, one of the reasons for the bullish move today.
Appetite for technology and hardware infrastructure stocks saw a revival, $SUPER MICRO COMPUTER INC(SMCI)$ soared +19% after reporting an EPS beat of 84% above estimates and raising its forward guidance. Cloud-computing platform $CoreWeave, Inc.(CRWV)$ also leaped +19.3% following stronger-than-expected sales results.
Semiconductors bounced, $Micron Technology(MU)$ leading the move with a +5% rally. On the $S&P 500(.SPX)$ side, our anticipated CDL acted as bullish above/bearish below reference, the price action moved in a narrow range between 7,737 and 7,758; both levels modeled yesterday for today’s session.
We study the daily levels for the SPX and now the $E-mini S&P 500 - main 2609(ESmain)$ every day as well, considering these overnight moves. Yesterday, I posted 7,762 as the central daily level for ES=F, with the next resistance zone at 7,787 in case a bullish move materialized. 7,794 was the effective top of the day today before the CPI data was released; since then, the futures have moved, testing 7,762 several times during the day.
The daily plan for the SPX and ES=F is below. They have both been moving in a narrow range during the last six trading days, with the futures testing a monthly resistance while the SPX tests a monthly level. Whichever index breaches its line first will provide clarity on the next major move.
High-Probability Trades:
It’s Wednesday, and several setups analyzed last Saturday have already reached their targets. I have been bullish on $S&P 500(.SPX)$ based on clear technical reasons; the 142.8 bullish target (+7.3% versus last Friday’s close) has been surpassed (currently +9% this week 🎯). $Netflix(NFLX)$ crossed its primary target and reversed at the extended one of 77 (+3.8%) 🎯.
$Wal-Mart(WMT)$ crossed its bullish target of 114 (+2.6%) and has accumulated 3.7% so far this week 🎯. $Amazon.com(AMZN)$ is bearish as expected, reaching its bearish target of 267.7 for a -2.5% move 🎯, and $Microsoft(MSFT)$ reversed to the bearish side as anticipated. Setups like $Visa(V)$ $SPDR Gold ETF(GLD)$ $SPDR Dow Jones Industrial Average ETF Trust(DIA)$, and MSFT remain constructive in their directional moves aiming at their targets.
When the indices are choppy, the power of individual names is significant. We have navigated these types of markets, and this week has been no different.
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