Is the Pullback Over?
Investors got bullish signals, as Fed Chair Jerome Powell indicated that central bank policymakers are open to cutting interest rates at their meeting next month, though perhaps not as aggressively as some had hoped. Lower rates should help sustain the market's summertime rally, especially after recent weakness in the jobs market and worries about AI spending had slowed the bulls.
Powell told the Jackson Hole conference that "the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance," signaling that rates could be cut as soon as September. This would mark nine months since the Federal Reserve's last rate cut.
Historically, such pauses have been good for stocks. When the Fed has waited 5 to 12 months between rate cuts, the market was higher a year later in 10 out of 11 instances.
Regarding the pullback that started during the week that just ended, I studied the price action from different perspectives for this publication, as you know, when there is an unexpected move I don’t fight the tape, I study more.
You will find below two charts with specific metrics and formations that suggest the pullback in the middle of this bull market is not over, and as usual, I provide specific price levels to validate that thesis, so once those levels are lost, the chances for a decline increase, as it happened during the week when the $S&P 500(.SPX)$ lost $6,431, or the $NASDAQ 100(NDX)$ didn’t even make it above $23,721.8 and for the record, that level was not reached after the rally.
The following heat map presents the price variation during the last 5 days, and you can tell how weak has tech been while the gains have been driven by other sectors like Energy ( $Energy Select Sector SPDR Fund(XLE)$ gained +3% during the week), Real State ( $Real Estate Select Sector SPDR Fund(XLRE)$ +2,4%), Materials (+2,4%), and Financials ( $Financial Select Sector SPDR Fund(XLF)$ +2,1%) as part of the group of sectors rallying more than 2%; Industrials, Healthcare, and Consumer Discretionary gained more than 1% during the week.
For whom haven't open CBA can know more from below:
🏦 Open a CBA today and enjoy privileges of up to SGD 20,000 in trading limit with 0 commission. Trade SG, HK, US stocks as well as ETFs unlimitedly!
Find out more here：
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
