SPY Technical Analysis & Weekly Stock Market Update


Chart done on hourly timeframe. It’s that time of year again where the world’s top economists and bankers come together for their annual Jackson Hole Economic Symposium and address current economic challenges and trends. This year’s focus will of course be around interest rates, inflation, and the post-pandemic impacts on U.S. and World Economies. To battle inflation, banks across the world raised interest rates, the U.S. in specific hiked rates to a 20 year high yet it still battles the lingering effects of higher prices. Those effects are reflected perfectly in the consumer spending habits reflected in recent retailer earnings. Last week, big box retailers like Target, Walmart, Home Depot, and TJ Maxx reported their quarterly earnings and one common trend amongst all is that consumers are more selective than ever when it comes to purchases. Walmart stood out from the bunch by raising outlook, citing that customers are looking for bargains and cheaper groceries. Spending on home goods, apparel, and DIY projects declined, once again because of a more selective consumer whom is budgeting for the current state of the economy. This week, more retailers are expected to report, but the biggest earnings focus is going to Nvidia’s. The semiconductor giant gained as much as 60% after its last earnings report based on strong demand for artificial intelligence chips, but recent market uncertainty has shaken up the stock. Artificial intelligence has been the backbone of the tech stock rally we’ve seen in 2023 so Nvidia may be able to help restore confidence in the market if it can deliver strong numbers, but most importantly, strong guidance. 

Technical analysis

SPY continues to trade below its 50 day moving average after breaking below it on August 16th, a level not broken since March 2023. The next available moving average support is the 100 day MA, which is also a level not seen since March. Friday’s move followed as expected with a gap down then full day low-momentum rally, but it still wasn’t enough to regain healthy levels. Going into this week, buyers need to restore the 444.30 range in order to take control back and potentially move SPY back to 448.00-450.00. Sellers are in strong control below 437.50 and can send SPY down to 425.00-426.00 if it breaks 431.20.