🚀 Final Destination📍

🚀 Final Destination📍| End-of-Year Market Outlook

"The stock market is filled with individuals who know the price of everything, but the value of nothing." – Philip Fisher

On-tap:

• Market Overview

• Notable News & Insights

• Investors Conviction & Investing Opportunities

• Sneak peek recap from our Elite Insiders

• $SPY Analysis

Market Overview

Last week, besides the early downside volatility, the market couldn’t break out of this 442-445 range. You will see in the reading later how our Elite Insiders capitalized on these moves.

Tech Price Action

• On many intraday occasions this week, we had moments where $SPY and $MSFT continued to uptrends, but $TSLA had 0 juice and closed red on the day. Another example is when $SPY started to look promising, and $NVDA was dragging the market down after the Chip & China News (More on that here)

When moments like this occur, it’s important to understand that there will be leaders and laggers during each session. Additionally, there will be truthful and deceiving movements. This week was full of deceiving movements as negative news held many stocks from their upside potential while sympathy companies held strong.

A questioned asked by a member was “why aren’t sympathy companies trading in the same direction?”

Sometimes, a ripple effect from news or price action is obvious, and in other moments, not so much. When a company that often trades in pairs with another company is part of the same sector it can cause that ETF to trade in small ranges. Therefore, It’s unnecessary noise and it’s where most day traders lose money trying to trade a trend that is non-existent.

Specific companies may thrive, but the index becomes non-tradable.

Examples:

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Here’s a free stock market finance terminology cheat sheet that will make you a savvy financial virtuoso.

Notable News & Economic Insights ⚠️

Week of September 3rd, 2023

1. U.S. recession chances were lowered by Goldman Sachs for the third time in four months.

2. Warren Buffett Sells $8 Billion Worth of Stock

   • This could be a billionaire forecasting the market & economic downturn or just some rebalancing in his portfolio to stay diversified in other investments.

3. China's slowdown is a 'top risk' for the U.S. economy

   • Economic performance in China has shown a notable decline over the past few months, and concerns have resurfaced regarding the challenges in the property sector, which could potentially have negative implications for the overall macroeconomic situation and business prospects.

   • The economic situation in China can have a ripple effect on the United States and the global economy due to several interconnected factors such as trade relations, supply chains, financial markets, and even commodities.

4. The Federal Reserve …

   • has successfully reduced its bond holdings by approximately $1 trillion since it initiated the process of reducing its large balance sheet last year. Notably, there haven't been any indications of the financial market stresses that had concerned policymakers during previous instances of similar balance sheet reduction efforts.

   • “The Fed’s debt runoff so far has been fairly painless,” said Blake Gwinn, head of U.S. interest-rate strategy at RBC Capital Markets.

5. Non-Farm Jobs:  

   • “Every Single jobs report in 2023 has been revised down”, per Peter Tarr

6. Apple products/NVDA chips are banned in China?

   • This is a rumor, as there hasn’t been an official report. However, even if said rumor is not valid, NVDA and other tech stocks have felt a negative reaction in their stock price

   • The economic situation in China can have a ripple effect on the United States and the global economy due to several interconnected factors such as trade relations, supply chains, financial markets, and even commodities.

7. Margin Squeeze? 😯👎 Don’t Trust Schwab (Very Notable)

   • Charles Schwab owes 130% of their total equity capital to short-duration FHLB loans that have to be paid back soon

   • They completely rely on customer deposits, which will be drained by October once student loans resume & the government shut down. Hear the whole story.

8. U.S. jobless claims fall to 216,000, lowest level since February

   • A decrease in U.S. jobless claims to a low level, like 216,000, is generally considered a positive sign for the economy. Lower jobless claims indicate a stronger job market and economic stability. However, it's important to consider other factors contributing to this decline, such as seasonal fluctuations, government policies, and broader economic trends. Low jobless claims do not necessarily reflect job quality or wage levels. Therefore, looking at other economic indicators and trends is essential to understanding the job market's overall health and economy.

Upcoming Week of September 10, 2023

• August Core CPI (Consumer Price Index) - September 13th, 8:30 am | Expected = 0.2%

• September Initial jobless claims - September 14th, 8:30 am | Expected = 220K, Previous = 216K

• August U.S Retail Sales - September 14th, 8:30 am | Expected = .1%, Previous = .7%

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Let’s continue…

Building Conviction and Confidence for Successful Investing

Investors can boost their conviction and confidence by adopting a well-rounded approach to investment. First and foremost, thorough research is key. Take the time to understand the companies you invest in, analyzing their financial health, business models, and competitive advantages. Diversification is another critical strategy; spreading investments across different asset classes can help mitigate risks. Patience is the most valuable asset an investor can have. Markets can be unpredictable in the short term, but history shows they reward those who stay invested for the long haul. Regularly reviewing and rebalancing your portfolio can help you stay aligned with your goals. Additionally, consider seeking advice from financial professionals or mentors who can offer guidance and insights. Ultimately, remember that investing is a journey, and the path to success often involves a combination of research, patience, and a well-thought-out strategy.

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All levels and intraday thoughts are given in the Elite Insiders daily newsletter if you are interested in levels. 

End of the year analysis 📝

Based on price action and the fact there is not a major catalyst in earnings or news until the FOMC interest rate hike, there may be room for the market to find a few trend days. It makes the most sense for those trend days to lead to lower prices, but if they lead to higher prices, I assume the market is projecting that no more rate hikes will be made.

Zoomed Out:

• If we start trading under 4495, softness could occur trading back to the 4470s. If bearish continuation enters the market before FOMC, 4170-4200s are interest levels for mid-term support.

• If the market cannot close below 4200 by FOMC late September, 4600+ remains a possibility.

• Can we trade higher for longer? Yes, of course. The point of this theory is currently, there is no catalyst in sight that could get the S&P 500 to trade below 4200. Keyword ‘currently.’ Stay tuned for more.

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