Daily Plan 8.29.23
Markets Close Higher in Line with Expectations - What’s Next?
Good morning, readers!
Today was primarily a subdued session. The Emini reached its long target OVN, while the Nasdaq still had considerable upside before attaining its target. Both maintained stability without any downside below their respective long levels. Meanwhile, Oil and Gold surged early, achieving their long targets swiftly. All stocks performed commendably, aligning well with my thesis. Tesla, in particular, experienced a significant gap up, only to retreat back to its long level, presenting yet another buying opportunity. Aside from these developments, there wasn't much excitement in today's session.
A substantial number of traders shifted their focus to China's market today. This attention was primarily because of a drastic 50% cut in stock trading taxes and the relaxation of margin requirements. However, tomorrow promises a different landscape, with several events potentially inducing market volatility. I'll delve deeper into these in the upcoming 'Events' section.
Before I transition to the rest of the newsletter, I must share an urgent announcement concerning this week. Hurricane Idalia is on a direct course towards my residence. Consequently, there's a heightened probability of internet disruptions in the vicinity. While it's difficult to predict the exact repercussions, I'll strive to keep everyone updated as circumstances evolve. Thankfully, power supply isn't anticipated to be an issue, but the stability of our internet connection remains uncertain. While I will endeavor to send out the latest levels, I advise extreme caution. Trading under such unpredictable conditions is risky, especially when there's a potential for sudden disconnection, compromising the execution of live positions.
For those in the path of Hurricane Idalia, I hope you and your families remain safe. I sincerely wish that everyone has access to essential supplies and necessities, preparing for any eventuality.
Sector Performance (Previous Session)
XLC - Communications: Standing tall at the forefront was the communications sector, with the XLC advancing by 0.64%. As the digital era continues to boom, the prominence of communication channels and platforms becomes increasingly evident. Whether it's the result of mergers, introduction of new technologies, or regulatory changes favoring the industry, investors are seeing potential in this sector.
XLE - Energy: Following closely, the energy sector saw a rise with the XLE moving up by 0.33%. Positive developments in global energy demand, as well as possibly stabilizing oil prices, might be influencing this uptick. Moreover, energy companies diversifying into renewable sectors could be driving this positive sentiment.
XLB - Materials: The materials sector demonstrated a promising climb, registering an increase of 0.30%. This progress indicates a possible uptick in construction activities and industrial production, suggesting a broader economic health and demand for commodities.
XLK - Technology: The tech realm, represented by the XLK, marked a progression of 0.26%. Continuous innovations, coupled with a digital shift across industries, keep this sector at the forefront of investment opportunities.
XLI - Industrial: Industrials, with the XLI at the helm, recorded a gain of 0.22%. This may point towards a revival in manufacturing, underpinned by positive trade developments and an evolving global supply chain dynamic.
XLRE - Real Estate: Real estate, tracked by the XLRE, edged up by 0.16%. This steady performance signals resilience in the housing and commercial real estate markets, potentially aided by urban development pushes and evolving mortgage landscapes.
XLF - Financials: The financial landscape, represented by the XLF, observed a modest ascent of 0.15%. This could be attributed to positive banking outcomes, or an economic climate that's conducive to lending and investment operations.
XLP - Consumer Staples: Essential goods, under the XLP's purview, saw a minor increase of 0.08%. Their relative stability, even with this slight growth, can be a reflection of a cautiously optimistic consumer sentiment.
XLV - Health Care: Health care took a slight hit, with the XLV declining by 0.19%. The sector's trajectory can be influenced by factors like regulatory changes or the advent of breakthrough treatments.
XLY - Consumer Discretionary: With a decline of 0.22%, the XLY indicates a shifting terrain for non-essentials. This can be influenced by consumer confidence, economic conditions, and disposable income metrics.
XLU - Utilities: Utilities, denoted by the XLU, slid down by 0.31%. Utilities might be grappling with challenges from changing energy dynamics or infrastructural advancements that necessitate significant investments.