Panic spread throughout the markets as the unemployment rate and Sahm Rule flashed early signals of a recession. This data comes from the Bureau of Labor Statistics as of July 31, 2024 – showing that the Sahm Rule has been activated (a cross of the dotted line).
Source: Bureau of Labor Statistics, JP Morgan
As a result of the warning signs, the S&P 500 (US500) and Nasdaq 100 (USTEC) have both declined by over 8% over the course of two weeks. With economic uncertainty looming in the market, investors and traders are waiting for the CPI and PPI data release on Wednesday, August 14th, 2024.
PPI and CPI Data Coming Tuesday and Wednesday
| Date | Data | Forecast | Previous |
| Aug 12 (Tues) | Core PPI m/m | 0.2% | 0.4% |
| PPI m/m | 0.2% | 0.4% | |
| Aug 13 (Wed) | Core CPI m/m | 0.2% | 0.1% |
| CPI m/m | 0.2% | -0.1% | |
| CPI y/y | 3.0% | 3.0% |
As markets are generally forward looking, watch for any surprises on these data releases to anticipate volatility on the upcoming days. A higher than forecasted PPI and CPI reading will strengthen the dollar, leading to bearish pressure on the markets.
S&P 500 Technical Analysis
Throughout its entire rise from October 2023 to July 2024, the S&P 500 has been finding support on the 20-Day EMA 200. Currently, it has broken down from this key EMA support, and also the major trendline support – flipping it into a resistance zone.
These levels should act as resistance:
- 20/50 Daily EMA at $5,400
These levels should act as support:
- Point of Control at $5,245
- Pivot Low and Psychological Level at $5,000
Nasdaq 100 Technical Analysis
Nasdaq 100 (USTEC) has fallen by over 15% from its all-time highs at $20,772, but has since seen a strong bounce on last Thursday with a bullish engulfing candle.
With this bounce, the Nasdaq has reclaimed its point of control (largest volume node), and is quickly approaching a descending trendline formed from the all-time high.
These levels should act as resistance:
- 50 Daily EMA and Large Volume Node at $19,105.28
- 100 Daily EMA (Coincides with Daily Trendline) at $18,783.56
These levels should act as support:
- Point of Control at $18,152.12
- 200 Daily EMA (Coincides with a Previous Consolidation Area) at $17,896.36
- Pivot Low and Psychological Level at $17,000.00
You may also be interested in:
Crude Oil Elliott Wave: A Brief High Before It Takes a Spill
RBNZ Holds Steady While Bitcoin Struggles to Find It’s Moon Boots
