Both the S&P index and the NASDAQ index are trading to new session highs and are making new week highs as well. The S&P is trading to new highs going back to last Wednesday. The NASDAQ index is trading to the highest level since Tuesday of last week.
In the process, the price is extending above 50-hour moving averages (black line on the charts below). For the S&P index, the 50-hour moving average comes at 4411.64. The current price is trading at 4426.17. Staying above is more bullish. The 38.2% retracement of 4439.12 and the following 100-hour moving average of 4450.42 are the next upside targets to increase the bullish bias in the short term/medium-term.
For the NASDAQ index, its price is also moving above its 50-hour moving average at 13511.35, but is also moving above its higher 100-hour moving average at 13680.29. The current price is trading at 13701.21 up 195 points or 1.45%. The next key target comes against the 50% midpoint of the move down from the July high. That level comes in at 13804.16.
Yields are lower with the 10-year yield down 10.3 basis points, helping the bias. Also helping is the weaker flash PMI indices as traders lessen their fears about a reacceleration of growth and inflation. The question going forward is "Is the slowing in growth too fast?", or "Will it be just right?". See Adam's post HERE.
After the close Nvidia will announce earnings. Last quarter, the high-flying stock rose 24% after the company surprised the market by targeting $11 billion for revenues in the current quarter (the estimate was at $7 billion). Nvidia shares are currently trading up $9.40 or 2.08% at $467. Its price spiked to a new intraday high yesterday near the open of $481.90 before tumbling to a low of $452 near the open today.
Later in the week, the Jackson Hole Summit will headline Fed chair Powell on Friday at 10:05 AM. In the past, Powell has made significant policy proclamations during his speeches.
Recall from last year, Powell told the market that the Fed would continue to tighten and be laser-focused on bringing down inflation. The fed funds target at the time was at 2.5% up from a low of 0.25%. The Fed funds target has since been raised to 5.5%.
What tilt - if any - will the Fed chair take this year?
Needless to say, his feelings and the market interpretation will be a big influence for stocks at least in the short term.
So buckle up. Understanding the risk in the bias-defining levels from a technical perspective, will certainly help