Has the US stock market reached its bottom?
Written by Moneypig Trading Inc. on July 31, 2022
Hello traders and investors!
1. Rome and Professor delivered a great week! Some highlights this week are:
11 #Daytrading 8 wins
$TSLA +135% +75% +50%
4 Earnings lottos 4 WINS!
$META earnings lotto +3%
2. Fed SOMA balance and market summary
Fed decreased its SOMA balance from $8.37 tn to $8.36 tn in the past 7 days. With Fed starts to slowly (really slowly) decrease the SOMA balance, we have to carefully monitor the overnight Repo market to make sure the market has enough liquidity.
Great earnings on several major stocks in the past two weeks pushed up the US stock market 1. Tech: Apple, Netflix, Microsoft, Amazon, Google, Tesla
2. Healthcare/ medical device: United Healthcare $UNH, Thermal Fisher $TMO, Danaher $DHR
3. Industrial: $F Ford, $URI United Rental, $GE General Electrics
4. Semiconductant: $TSM Taiwan Semi, $TXN Texas Instruments, $LRCX, $ASML
5. Restaurants: $CMG, $MCD
However, there are concerns that we have witnessed this week & have to monitor closely:
1. US economy & Retails: $WMT Walmart has lower guidance & has tons of inventory. Similar things happen to $SKX Sketcher and $ADDYY Adidas. $TGT Target, $COST Costco, $LULU Lululemon earnings on Aug 17 & 25 & Sept 1st, respectively, are the key to watch. If retailers slow down, they will order fewer goods and lower the outlook of major semiconductors, industrial, and tech stocks. This effect is called Bullwhip Effect.
2. China's economy is slowing down with a big real estate loan crisis. China blowup, Apple, Tesla, Microsoft, and a bunch of semi-stocks will go down as China is the 2nd largest economy in the world and the 2nd major revenue source for all these companies listed above.
3. $SPY $ES level:
ES: ES broke out of the falling channel we had, and saw a great breakout throughout. Bulls have full control of this chart as long as it's above 4000. The next target resistance is at 4340, the upper trendline, and 4200 is another big psychological level to watch. Supports next week are 4108, 4080, 4000, 3980 last two zones must hold for the bulls camp. Resistance at 4132, 4155, 4200. We could have a consolidation period next week and let RSI cool off before the next major run.
Moneypig Trading Discord
If you are interested in our Discord community, check out https://moneypigtrading.com! Also, don’t forget to give us a thumbs up, and follow us on our social media!
Youtube (English): MoneyPigTrading
Thank you for reading and have a great day!
Moneypig Trading team
Just a quick disclaimer: Moneypig Trading (https://www.moneypigtrading.com/) is not a financial advisor. Please invest at your own risk.