Markets coast into the weekend

Interesting day for the markets as everyone left for vacation and left it to trade within itself. The economic data on the day was positive overall with the exception of consumer spending showing a decline versus July and expectations. The drop of 0.1% was not helpful for the argument looking forward and a trend to watch. The consumer sentiment rose in contrast to the spending number hitting 82.5 versus 80.1 in July. The report beat expectations and shows for now all is positive looking forward. The Chicago PMI jumped back into a positive upside mode hitting 64.3 versus July at 52.6. The trading was thin and the indexes traded close to even as we push into the long weekend.

Russia (RSX) gets more selling as investors disown the process of worrying about the advances with Ukraine towards war. RUSS was up for the second day more than 9%. Not willing to trade on emotional news, but this is one that day trading may offer opportunities if that is you thing. The US markets ignored the move and made upside moves relative to where buyers were confident. The chart below shows the move lower in Russian ETF.

Chart

Gold move slight lower following the positive day on Thursday, but the gold miners found buyers moving pushing the sector higher on the day. GDX remains within the trading range and the move was midway on Friday. Still a positive setup for a short term trading opportunity if you are willing to manage the risk. The commodities have been a weak sector putting higher risk on the trade. The base metals (DBB) bounce off the near term low, but the underlying metals are still showing too much volatility. Copper (JJC) moved higher last week and gave back 80% of the move this week… volatility is prevalent and presents higher risk for investors.

Semiconductors (SMH) jumped above resistance on Friday with a gap above the previous highs at $51.25. This is a push back towards resuming the previous uptrend and with a follow through next week we could get entry signals for owning the sector as a short term trade. NXPI and SWKS both led the sector higher with breakout moves of their own. Watch this next week for follow through opportunities. The chart below show the break higher and what we are watching.

Chart

Small caps (IWM) made a positive to move to keep the uptrend break higher from last week in play. The selling on Thursday was a test on the move an the follow through move today keeps the trend in play short term. TNA is the three times leveraged ETF for the trade due to the micro time line for the trade.

Another positive week with some increased volatility. The S&P 500 index made a move above the 2000 mark during the week and investors did their best to keep it there on the close Friday. Next week start the month of September and historically shows more negative than positive influence on the broad indexes. I say watch and see how it sets up and what plays out. Take action based on what you know versus what you believe to be true. The charts will confirm what is taking place both short term and longer term. Take time to learn how to interpret the moves on the chart. Relax, have a positive weekend and get ready for what promises to be an interesting week of trading.

All updates will be posted Monday for the Tuesday trading day.