EB Daily Market Report - Thursday, August 29, 2024

Here's an update covering things you need to know from today's action....

The 2nd estimate of Q2 GDP came in slightly better than the initial reading, 3.0% vs. 2.8%.

The Dow Jones hit another all-time record high intraday, nearly touching 41578, which is roughly 160 points higher than the record high set on Monday:

The Dow Jones does appear set to set a new closing high above 41250, barring further final hour selling.

The selling in the final two hours has been much more intense on the NASDAQ 100 than say the Russell 2000 (IWM). Check this out:

Please understand that the IWM has also lost ground on an absolute basis, but the bottom panel shows the IWM gaining ground on a relative basis. To me, this suggests further rotation into small caps.

Investors didn't exactly like what it heard from NVIDIA Corp (NVDA) after the bell yesterday, despite the company beating revenue and EPS consensus estimates. NVDA also raised its revenue guidance on a forward-looking basis. Unfortunately, the reaction was not very good as NVDA is down and breaking below both its 20-day EMA and 50-day SMA (red circle):

Now that NVDA has rolled over, it certainly appears that we have a downtrend resistance line in place that NVDA will need to bust through before having another opportunity to reach all-time highs. When a leading stock in the most influential industry group beats top and bottom lines, raises guidance, and fails to life the group at all, you know you've got further challenges ahead.

NVDA's poor showing is contributing to a very weak semiconductor group ($DJUSSC):

I've drawn two key support levels if semiconductors continue to weaken during the September/October time frame.

Biotechs ($DJUSBT) were on the threshold of a key long-term breakout earlier, trading as high as 3120, before falling back over the past 2-3 hours:

I see a breakout coming, but we may have to wait just a bit more time first, barring a final 30-minute surge.

Value-oriented areas of the market are showing leadership once again today, highlighting the bullish rotation taking place into some of those areas as they catch up with the high octane growth areas:

Happy trading!

Tom