8/2/23 A Need For Balance


Markets appear to be finding balance. 

However, despite the red day, bears fail to capture any significant part of the market.

The indexes ended the day mixed…

  • Dow Jones +0.2%
  • Nasdaq -0.4% 
  • S&P 500 -0.3%
  • Russell 2000 -0.5%

The Dow, which is only 30 stocks, was held up by industrial giant Caterpillar (CAT).

Photo from Getty Images
  • CAT stock gained nearly 9% after reporting “double-digit growth” across the board
  • Less than one-third of Dow components closed green on Tuesday
  • Tuesday’s spike added over $11 billion in market cap to the company

Sector Round Up

2 of the 11 sectors ended Tuesday in the green.

The winners…

  • Industrials (XLI) +0.3%
  • Technology (XLK) +0.2%

The losers…

  • Consumer Staples (XLP) -0.5%
  • Consumer Discretionary (XLY) -1.3%
  • Utilities (XLU) -1.2%


The Dow keeps adding, but history tells us lower prices are ahead…

DIA Daily Candles w/10-day RSI – Chart by thinkorswim

What is important to understand is that the drawdown doesn’t mean we’re heading for a bear market.

We continue to book profits on our winners and limit new positions until the market cools.

Futures are lower this morning as the market seeks to rebalance.

Your latest readout…


August is traditionally a weak month for the markets.

On average, it’s the worst month for the Dow Jones and the second-worst month for the S&P 500.

Given the lingering overbought conditions and seasonal weakness, bears are anxious to pounce. We think they’ll succeed … Eventually.

We are looking to buy the dip, which usually bottoms in October.


*Low Float
^Open Position

*ULBI on watch
*CLEU support at $1.80
AMSC on watch
EYPT support at $12
MNMD support at $4.20
TUP support at $4
EH support at $20
^OSTK support at $35
UPST support at $60
NRDY support ta $4.50
AIXI on watch
WW support at $10, resistance at $12
GDRX on watch
QSI support at $3.50
MVST support at $2.50

Secondary watchlist—float 100+ million

CAVA on watch
^RGTI support at $2.25
SDC support at $1
MKFG resistance at $2
^IONQ support at $18
AKBA support at $1.60
QS support at $12
NKLA support at $3
^PLTR support at $18

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