When it was all said and done this week, here are what the final numbers looked like: Dow (-0.7%), S&P 500 (-0.5%), Nasdaq (-0.6%).
And while all major indices posted a modest decline, those numbers don’t tell us how wacky and wild it was for traders.
We can thank the ongoing trade war between the U.S. and China for adding to this week’s market volatility.
Here are some highlights:
- Dow drops as much as 925 points on Monday amid increased trade talk tensions between the U.S. and China, while the Nasdaq drops by more than 3.4% on the day
- Stocks catch a bounce on Tuesday, gaining a little more than 1% and snapping a six-day losing streak
- On Wednesday the Dow nearly drops 600 points only to recover and close almost unchanged. In what was the biggest red to green intraday swing we’ve seen all year.
- China devalued its currency against the U.S. dollar to its lowest levels since 2008
- Gold cracks $1,500 an ounce and is trading near 6-year highs
- Global bond yields have dipped to 120-year lows
- The VIX, the market’s fear index, got up as high as 24.79 on Monday, but managed to close below 20 on Friday, settling at 17.97.
Can we expect more volatility ahead going into next week?
What’s going on with commodities like gold and silver, are they a better place to be in than stocks moving forward?
And what about the upcoming catalysts for the week, what should you be looking out for?
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Table of Contents
More Volatility Ahead?
Well, U.S. stocks ended one of its most volatile weeks… and actually finished only slightly lower… which was remarkable, considering that major market indices were down ~3% on Monday, as well as the ongoing trade war concerns heading into the weekend.
President Trump stated yesterday, “We are not going to be doing business with Huawei… And I really made the decision. It’s much simpler not doing any business with Huawei. … That doesn’t mean we won’t agree to something if and when we make a trade deal.”
Not only that, the POTUS further escalated trade tensions by stating the U.S. is not ready to make a deal with China.
Keep in mind, the POTUS made its decision on Huawei after China halted purchases of U.S. agricultural products, as well as allowed its currency to drop below a key level against the dollar for the first time since 2008.
It’s quite clear that there are still ongoing trade tensions, and this volatility might not be over. With that being said, there are some key levels to watch in the SPDR S&P 500 ETF (SPY).
On the daily chart, $290 and $282 are levels to keep an eye on, as well as the 200-day simple moving average at $277.
On the hourly chart, we’ve seen a bullish crossover, and SPY is above $290… but has some resistance at $297 at the 200-hourly simple moving average. For now, I’m going to remain patient before I make any moves in SPY, or other market-tracking exchange-traded funds (ETFs) like QQQ or IWM.
Bond Yields Getting Crushed
Not only have stocks been volatile, but bond yields have been getting crushed, which is sending other asset classes soaring.
Why?
Well, global bond yields have dropped to a 120-year low, according to Bank of America Merrill Lynch.
For example, we’ve seen the U.S. 10 Year Treasury Yield drop below 2% for the first time since 2017.
Not only that, the 30-Year Treasury Yield has been collapsing, and approaching the 2% very quickly.
When we see bond yields drop like this, it actually affects assets like gold and silver.
Gold prices broke above $1,500 for the first time in 6 years due to the political tensions, fears of a global economic slowdown, as well as the fall in yields.
Not only that, we’re seeing silver prices finally started to move higher last week, reaching levels it hasn’t seen in 18 months.
With that being said, I’m going to keep an eye on yields, bond ETFs like TLT and IEF, as well as gold- and silver-related stocks or ETFs… and of course the VIX.
There are a number of economic indicators next week, and they could give us clues as to where interest rates are headed… which can uncover multiple opportunities for us to trade.
Economic Calendar
Monday, August 12
- 8:30 AM EST Monthly Budget Statement for July
Tuesday August 13
- 6:00 AM EST NFIB Small Business Optimism
- 7:45 AM EST ICSC Weekly Retail Sales
- 8:30 AM EST Consumer Price Index (CPI)
- 8:55 AM EST Johnson/Redbook Weekly Sales
- 4:30 PM EST API Weekly Inventory Data
Wednesday August 14
- 7:00 AM EST MBA Mortgage Applications Data
- 8:30 AM EST Import Prices
Thursday August 15
- 8:30 AM EST Weekly Jobless Claims
- 8:30 AM EST Continuing Claims
- 8:30 AM EST Empire Manufacturing
- 8:30 AM EST Nonfarm Productivity
- 8:30 AM EST Unit Labor Costs
- 8:30 AM EST Retail Sales
- 9:15 AM EST Industrial Production
- 9:15 AM EST Capacity Utilization
- 10:00 AM EST NAHB Housing Market Index
- 10:00 AM EST Business Inventories
- 10:30 AM EST Weekly DOE Inventory Data
- 10:30 AM EST Weekly EIA Natural Gas Inventory Data
- 4:00 PM EST Net Long-term TIC Flows
Friday August 16
- 8:30 AM EST Housing Starts
- 8:30 AM EST Building Permits
- 10:00 AM EST University of Michigan Sentiment
- 1:00 PM EST Baker Hughes Weekly Rig Count
We’ve still got a lot of companies reporting earnings as well.
Not only do traders have to figure out what’s going on with politics and macroeconomics, they’ve also got to analyze earnings right now. Next week, we’ve got a lot of large-caps reporting, and I’ll be keeping an eye on some of these to try to uncover some opportunities.
| SYMBOL | EARNINGS DATE | CLOSE PRICE | IMPLIED MOVE |
| SYY | Aug. 12, 2019 BO | $69.99 | 4.46% |
| TSG | Aug. 12, 2019 BO | $15.98 | 10.26% |
| GOLD | Aug. 12, 2019 BO | $17.06 | 6.39% |
| EC | Aug. 12, 2019 AC | $16.69 | 6.99% |
| PAM | Aug. 12, 2019 AC | $35.12 | 10.87% |
| TEO | Aug. 12, 2019 AC | $15.70 | 5.85% |
| TME | Aug. 12, 2019 AC | $14.45 | 9.86% |
| JD | Aug. 13, 2019 BO | $27.10 | 8.02% |
| AAP | Aug. 13, 2019 BO | $144.33 | 7.96% |
| GDS | Aug. 13, 2019 BO | $38.42 | 8.32% |
| IAA | Aug. 13, 2019 BO | $45.01 | 8.30% |
| PSN | Aug. 13, 2019 BO | $37.14 | 7.24% |
| CVET | Aug. 13, 2019 BO | $23.82 | 13.14% |
| ELAN | Aug. 13, 2019 BO | $30.65 | 7.50% |
| IIVI | Aug. 13, 2019 BO | $38.07 | 9.59% |
| GO | Aug. 13, 2019 AC | $37.84 | 10.50% |
| YY | Aug. 13, 2019 AC | $52.12 | 9.63% |
| CDK | Aug. 13, 2019 AC | $48.66 | 5.53% |
| CPL | Aug. 13, 2019 AC | $17.11 | 2.89% |
| LTM | Aug. 13, 2019 AC | $9.80 | 8.06% |
| ADPT | Aug. 13, 2019 AC | $41.63 | 11.54% |
| BILI | Aug. 13, 2019 AC | $13.91 | 8.60% |
| HUYA | Aug. 13, 2019 AC | $20.39 | 12.62% |
| MYGN | Aug. 13, 2019 AC | $45.48 | 11.23% |
| TLRY | Aug. 13, 2019 AC | $42.57 | 11.73% |
| M | Aug. 14, 2019 BO | $19.43 | 9.55% |
| LK | Aug. 14, 2019 BO | $25.94 | 16.18% |
| AIT | Aug. 14, 2019 BO | $55.34 | 6.24% |
| ERJ | Aug. 14, 2019 BO | $19.83 | 4.90% |
| GOOS | Aug. 14, 2019 BO | $43.73 | 14.18% |
| PFGC | Aug. 14, 2019 BO | $43.86 | 6.30% |
| A | Aug. 14, 2019 AC | $68.64 | 5.71% |
| CGC | Aug. 14, 2019 AC | $32.90 | 9.65% |
| CHU | Aug. 14, 2019 AC | $9.27 | 3.24% |
| CIG | Aug. 14, 2019 AC | $3.66 | 28.77% |
| ELP | Aug. 14, 2019 AC | $13.13 | 7.63% |
| SBS | Aug. 14, 2019 AC | $14.51 | 6.98% |
| UGP | Aug. 14, 2019 AC | $4.91 | 4.65% |
| AABA | Aug. 14, 2019 AC | $70.02 | 0.40% |
| CACI | Aug. 14, 2019 AC | $211.23 | 5.90% |
| CSCO | Aug. 14, 2019 AC | $52.43 | 5.21% |
| NTAP | Aug. 14, 2019 AC | $46.58 | 6.49% |
| PRSP | Aug. 14, 2019 AC | $22.34 | 6.38% |
| STNE | Aug. 14, 2019 AC | $36.07 | 8.98% |
| VIPS | Aug. 14, 2019 AC | $6.49 | 12.30% |
| WUBA | Aug. 14, 2019 AC | $52.34 | 7.69% |
| AEG | Aug. 15, 2019 BO | $4.25 | 15.01% |
| GFI | Aug. 15, 2019 BO | $6.11 | 7.20% |
| MSG | Aug. 15, 2019 BO | $294.69 | 2.87% |
| NIO | Aug. 15, 2019 BO | $3.13 | 9.46% |
| TPR | Aug. 15, 2019 BO | $27.39 | 9.20% |
| WMT | Aug. 15, 2019 BO | $107.28 | 4.40% |
| BABA | Aug. 15, 2019 BO | $159.12 | 5.76% |
| CZZ | Aug. 15, 2019 AC | $14.23 | 9.59% |
| AMAT | Aug. 15, 2019 AC | $47.15 | 5.85% |
| GLOB | Aug. 15, 2019 AC | $107.35 | 9.14% |
| NVDA | Aug. 15, 2019 AC | $154.18 | 8.09% |
| VIAV | Aug. 15, 2019 AC | $14.20 | 7.78% |
| DE | Aug. 16, 2019 BO | $154.84 | 5.84% |
| QD | Aug. 16, 2019 BO | $8.92 | 12.89% |
I think it could be another volatile week for the markets bumpy… and it can be very easy to get chopped up in all the back and forth price action.
However, I have multiple strategies that have been proven to make money in all market conditions… especially when stocks start to sell-off. Wherever the market decides to go, I’ll be in a position to produce triple-digit returns with my money pattern.
Source: WeeklyMoneyMultiplier.com | Original Link