Respecting the Levels: A Winning Strategy
The stock market saw a mixed finish to the week, with the $Dow Jones(.DJI)$ and the $S&P 500(.SPX)$ setting new all-time intraday highs before pulling back. Broader market weakness, particularly in the technology sector, weighed on the major indices.
The $GLOBAL X DOW 30® COVERED CALL ETF(DJIA)$ reached a new intraday high of $45,203.5, and the S&P 500 touched $6,481.3 before pulling back. Our major target shared to premium subscribers months ago can be considered reached.
The Health Care sector was the standout performer, gaining 1.7%, largely driven by a 12.03% advance in $UnitedHealth(UNH)$ following news of a significant investment by $Berkshire Hathaway(BRK.A)$ $Berkshire Hathaway(BRK.B)$ , but most importantly, the stock opened on Monday above $247, the central weekly level that defines bullish or bearish conditions, similar to BRK.B that had a bullish reading in my previous Weekly Compass, the stock stayed above its central weekly level of $464. In contrast, the Information Technology sector fell 0.8%, pressured by a 14.7% decline in $AMATI AIM VCT(AMAT.UK)$ after its forward guidance disappointed investors.
For the $NASDAQ 100(NDX)$ , my analysis provided last weekend mentioned the chances of a visit to the bullish target or first resistance at $23,829 and a retrace, and indeed the price for the week danced around that level before falling a bit on Friday. 0.51% is a small change.
In a separate note, my publication on Wednesday correctly anticipated the chances for the price to avoid an immediate pullback, considering special indicators shared that day.
Macro: A preliminary reading of the University of Michigan Consumer Sentiment survey for August showed a decline to 58.6, its first drop in four months, attributed to rising inflation concerns (this is a key indicator analyzed in the latest macro update).
The probability of a September rate cut, according to the CME FedWatch Tool, edged lower to 84.9%. In the bond market, the 10-year Treasury yield rose four basis points to 4.33%.
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