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📉 Not trying to be bearish but...
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Happy Masters Sunday. No better day to relax, watch some golf, and get caught up on market trends.
MARKET RECAP
SPY Breaks Trend As Inflation Hangs Around
SPY Weekly Chart
This week the markets sold off Wednesday in reaction to the consumer price index (CPI) report which showed that prices rose 3.5% year over year. This news makes it even tougher to justify rate cuts year which is crucial to keeping the markets propped up. The markets rebounded on Thursday after the PPI Report, measuring wholesale prices, came in lower than expected.
JP Morgan and other big banks kicked off the bulk of earnings season Friday morning. JPM issued weak guidance sending its stock spiraling down 6.5% and bringing the rest of the market down with it. SPY closed the week below the 21 ema and awfully close to the 50 ma. Now it looks like the 8 ema is going to cross the 21 ema.
The reality is that inflation is a real problem and the markets will not like the fed to hold off on cutting interest rates. Every bull run has to come to an end at some point and it certainly looks like we are headed that direction now. Before stocks weaken there is always a technical trend break, which we see here with the SPY finally breaking below the 21 ema. Unfortunately there aren’t any big catalysts until big tech starts reporting earnings in 2 weeks.
Now with middle east tensions rising and WWIII on the brink of starting the situation in the markets don’t look too hot in the short term. If SPY breaks past the 50 ma this week there is nothing holding it up until way lower at $464 where the 200 ma sits. Hopefully the markets can hold the 50 ma until big tech reports next week.
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TRENDWATCH
Apple Looks to Turn Its Rough Year Around
Apple Daily Chart
Its no secret that Apple has had an awful start to the year, but this week there was a glimmer of hope when the tech giant announced they plan on overhauling their Mac line with new AI focused M4 chips. The announcement saw Apple adding $112 billion in market cap Thursday and its stock having one of the best days in recent memory. This pushed the stock above the 8 and 21 ema’s and then briefly overtaking the 50 ma in midday trading Friday. I am keeping my eye on Apple to see if this technical trend shift can keep pushing the stock upward.
Last Weeks Trend: UBER
Last week I pointed out UBER as my trend watch to see how it would respond to wedging between the 50 ma and the 8 ema. The stock quickly dropped below the 50 ma and the 8 ema crossed it with the 21 ema looking to cross it this week. I expect some short term weakness for the transportation company.
In the News
💻 Google unveils new AI Chip earlier this week sending its stock to have another solid week.
🚗 Tesla halts Cybertruck deliveries
UPCOMING WEEK
With the bulk of earnings season kicking off, here are some notable reports this week:
Monday: Goldman Sachs and Charles Schwab
Tuesday: United Health, Johnson & Johnson, Bank of America, Morgan Stanley
Thursday: Taiwan Semiconductor Manufacturing, Netflix
Friday: Proctor and Gamble, American Express
Other than these earnings, it is a relatively quiet week. Most institutions eyes will be focused on big tech earnings next week.