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08/25/2023 |

Market Update Into August 28th: NVDA, JPow, and Mixed Signals

The week started off strong, with market participants eagerly awaiting the earnings announcement from the behemoth, NVDA. The announcement came and it was good, causing markets to lift in after-hours on Wednesday. Unfortunately for bulls, though, those gains were given back by Thursday’s close. On Friday, Jerome Powell held a brief press conference from Jackson Hole and markets seemed to like what he had to say, as a rally ensued to close out the week.

Now, markets are in an interesting spot. Last week’s lows were held on two of the three major indices, which suggests the possibility of a reversal higher, but we’re a week away from September, which is historically the weakest-performing month for stocks. Can the bulls pull a rabbit out of the hat here, or will the bears regain control in the weeks to come? Let’s dig into the charts and see how things are looking.

Weekly Analysis

This week, the SPY ETF closed at $439.97 (+0.79%), marking another week below the ascending channel but inside the previous weekly candle. The 20-week SMA is currently serving as support, and with Stochastic RSI nearing oversold conditions, this index could be setting up for a reversal higher in the weeks to come despite short-term unusual options positioning favoring puts.

This is an image of the weekly chart of the SPY index
This week, the QQQ ETF closed at $364.02 (+1.65%), below the rising wedge but putting in a higher high and a higher low relative to last week’s candle. The oversold reading on the Stochastic RSI suggests the potential for a move higher in the coming weeks.

This is an image of the weekly chart of the QQQ index
This week, the IWM ETF closed at $184.00 (-0.35%), making it the only index that closed red on the week and also the weakest performer of the group. Price managed to find support at the 20-week SMA and the bottom of the broadening range pattern, which will both be key levels to hold if this index is going to move higher in the weeks to come. Of note is the put-heavy short-term unusual options positioning.

This is an image of a weekly chart of the IWM index.

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