Rate Cuts - Are They Bullish For The Stock Market?
Get access to the second installment of this visual historical study, and learn how the current market compares with scenarios when there was a crash after such moves
In this second installment of the rate cuts and rate hikes analysis, the coverage has been expanded to include additional events and provided a consolidated summary.
This edition focuses on the stock market. Next week, we will conclude the series with an analysis of bonds and macroeconomic indicators. This will help us understand the potential market reactions to a September rate cut.
Before going to the analysis, one note about the market today:
$S&P 500(.SPX)$ finally divorced from the Nikkei, declining -0.60% and drawing a bearish reversal chart. $5575 is the level to watch tomorrow, and since the $NVIDIA Corp(NVDA)$ earnings presented a negative reaction, a gap fill is very likely.
On the other hand, the $Cboe Volatility Index(VIX)$ presents a bouncy chart, building on the thesis of a consolidation, the volatility index jumped 10.9% today.
That should be the main concern for bulls beyond NVDA, and 17.79 for VIX is the level that will make a difference between an accelerated decline and a consolidation (very bearish for SPX above that).
Most of tech mega- caps closed last week with a bearish setup, unfortunately the charts were telling the truth and NVDA falling suggests a domino effect.
NVDA has good fundamentals, so the price is expected to move in the current volume shelf during this consolidation process, of course, there is a wide area and the lower edge of the shelf is $110, which matches the 100DMA. That level is a potential entry point… if it is reached.
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