The S&P and NASDAQ indices are reaching new session highs and achieving new week highs. The S&P index is trading at new highs since last Wednesday, while the NASDAQ index is at its highest level since Tuesday of last week. Both indices are extending above their 50-hour moving averages, indicating a bullish trend. The S&P index’s next targets are the 38.2% retracement of 4439.12 and the 100-hour moving average of 4450.42, while the NASDAQ index aims for the 50% midpoint of the move down from the July high at 13804.16.
Yields are lower, with the 10-year yield decreasing by 10.3 basis points. This, coupled with weaker flash PMI indices, has eased traders’ concerns about the reacceleration of growth and inflation. Market participants are now questioning whether the slowing in growth is too fast or just right. Nvidia will announce its earnings after the close, following a previous quarter where the company exceeded market expectations. The upcoming Jackson Hole Summit, featuring Fed Chair Powell’s speech on Friday, is anticipated to have a significant impact on the market, similar to Powell’s previous speeches where he made important policy announcements.
Last year, Powell indicated that the Fed would continue to tighten and focus on reducing inflation, leading to an increase in the fed funds target from 0.25% to 2.5%. The market is now awaiting Powell’s stance this year and how it will influence stocks, at least in the short term. Understanding the risk and the technical levels that define the bias will be crucial for investors in navigating these market conditions.