SPY Technical Analysis & Weekly Stock Market Update


Chart done on hourly timeframe. Major indexes continued to trade near their August lows last week despite stellar earnings from Nvidia. The company’s strong numbers weren’t enough to save the market from The Fed’s hawkish remarks at the Economic Symposium. Fed President Jerome Powell advocated for restrictive policy and maintained his viewpoint that inflation is still too high, so no sign of a definitive end for interest rate hikes yet. This week, which will wrap up August, we’ll get multiple reports about the current state of the U.S. labor market and inflation. The PCE index, which has steadily shown inflation is cooling down month over month, is expected on Thursday. This index is The Fed’s preferred inflation gauge so its important that it continues to decline towards 2% (last reading was 3%). As for the labor market, several reports are expected through the week, but the most important is Friday’s non-farm payrolls report; which will give us an update on the current unemployment rate and how many jobs were added in August. 

Technical analysis:

August has historically been a volatile month for stocks, and it has followed this trend once again. Going into the final week of this month, our main support in focus for SPY is the 431.20 mark. Buyers need to defend that level to avoid a sell-off to 425.00-426.00. The overnight trend is currently bearish, and it will remain as so unless buyers move SPY above 446.80. If successfully broken, the next bullish price target would be 451.75-452.00.