Technical Stock Market Briefing for Day & Swing Traders
| By Harry Boxer, Technical Market Analyst
Summer Rally Meets Seasonal Headwinds
The market’s summer rally has been impressive, but the winds of autumn tend to test investor resolve. Historical patterns point to a bumpier ride in the months ahead, even as underlying fundamentals remain supportive.
The major U.S. stock indexes finished fractionally lower for the week after the market’s midweek gains were offset by a Friday pullback entering the holiday weekend. The S&P 500 on Thursday closed above the 6,500-point level for the first time, but it slipped
back below that threshold the next day.
Gold Record Highs & AI Expectations
The price of gold futures rose for the second week in a row and reached a record high of as much as $3,518 per ounce in Friday afternoon trading—up more than 31% year to date.
Artificial intelligence (AI) remains a dominant market driver, with strong infrastructure investment and economic contributions. However, lofty expectations — as highlighted by NVIDIA’s muted earnings reaction — are becoming a headwind.
NVIDIA’s muted stock reaction despite impressive growth underscores the challenge of high investor expectations. While AI infrastructure demand remains robust, growth rates will naturally moderate over time. Still, it seems that AI adoption is in its early
innings and will continue to be a dominant market theme.
Rotation to Small Caps & Broader Participation
Strong indications of Fed policy changes are sparking a healthy rotation in previously overlooked areas of the market. Interest rate-sensitive small-cap stocks surged 7.5% in August, their best month of relative outperformance versus the S&P 500 in nine months.
Autos, airlines and homebuilders also posted strong gains, and the equal-weighted S&P 500 reached new highs, signaling broader market participation.
Historically, Fed rate cuts tend to be supportive for equities when the economy is not in recession, and current conditions suggest we are on that path.
Seasonal Volatility Ahead
September and October have often brought increased market fluctuations and softer returns. However, these headwinds tend to be short-lived, with markets typically rebounding strongly afterward.
In any case, as we always do at thetechtrader.com, we will “Trade What We See Technically, Not What We Think”
Get Live Market Analysis As It Happens & Gain an Edge In Trading
Level up your trading by gaining access to real-time market insights, expert technical analysis, and actionable trade setups from 50-year veteran trader and expert analyst, Harry Boxer.
