The opinions expressed below are my own and do not necessarily represent those of Visdom Investment Group, LLC.
No sizzle
Nvidia beat, of course, but the expectations were so lofty that the stock pulled back today. Futures were slightly traded up and down in the premarket but didn’t make big moves. The index opened down about 30 points and traded quietly down there until news of a final agreement between the US and Iran broke. The usual trades commenced. Stocks rallied, yields fell, crude fell, the Dollar fell, and precious metals popped. Late in the afternoon, Iran’s President said they won’t back down in the talks. Additionally, reports broke that the Pakistan Army Chief would not visit Tehran, something that was expected as part of a significant step towards an agreement. The usual market reactions commenced. The US/Iran deal remains MIA and markets aren’t sure how to handicap it.
All things considered, today was a very calm day. Nvidia and the US/Iran agreement are big fundamental catalysts for the entire market. The fact that these catalysts didn’t send prices flying off in one direction or another is pretty remarkable. Where does this leave the S&P then?
If we’re in a window of time without major fundamental catalysts, which is how things appear, we’re destined to trade on technical and sentimental factors. Sentiment remains optimistic but has retreated from the euphoric levels of last week. Technicals still point to somewhat overbought conditions. Moving averages are not in play because they are so far below current prices.
It’s likely that we continue to consolidate. 7500 to the upside would be a new breakout but it seems unlikely without a driving force from a fundamental catalyst. 7300 *could* be a downside support level just because it’s a big figure but there would almost certainly be increased dip-buying activity just under 7400 first.
I think we’re looking at a range, probably through the end of the month. 7300 to 7500 seems about right if we’re projecting going through the motions for a while.
See you tomorrow.
-Mike
Visdom Market Commentary
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