Weekly Market Outlook: Expecting S&P 500 to Retest Record

Week Ahead: 2 Sept, 2024

While the Destined One was busy recovering relics in the blockbuster game Black Myth: Wukong, the markets continued their rally. The Dow Jones Industrial Average (DJIA) closed the month at a record high of 41,335.05. In Asia, the Hang Seng Index gained 1.14%, and the Straits Times Index added 1.13% for the week.

The overall U.S. economic narrative continues to suggest a 25 basis points (bps) cut in September, with some possibility of a 50 bps cut. As mentioned previously, we intend to continue trading the rally until key data or technical indicators suggest otherwise.

From the performance of various indices, we can observe that stocks outside the Mag7 are experiencing broader catch-up, which also suggests this is where we should look for our trading setups or alpha.

We expect both the S&P 500 and STI to retest their respective highs, which are not too far away. USD weakness remains as one of the key catalyst fueling the performance of Asian equities. Note that U.S. markets will be closed on Monday.

Headlines for the week:

- Corp Earnings (Broadcom, Chinese Banks)

- US Aug Jobs Report, ISM Mfg

- China Aug PMI

- SG Aug PMI, Retail Sales

Disclaimers apply

Wyckoff's Law of Effort

Law of Effort Wyckoff's Law of Effort states that on any single trading day (or week depending on time frame), huge volume (effort) push by participants should see huge price movement, resulting in a wide spread (long body). This is a basic principle of effort and result. However, as per Singtel's case study, we saw huge selling volume on 11 May, yet the price action only shows a narrow spread (small body). This divergence of effort and result in Wyckoff's Law of Effort principles, indicates possible exhaustion in selling or hidden buying. Thus, with a lack of weakness, Singtel should continue trading range bound for the coming days or weeks till further strength or weakness is observed. Swing Traders who trades range can consider positions at 3.70-3.72, with exit target 3.76-3.78.

DBS Group Holdings (D05): Upward Move Expectations

DBS Group Holdings (D05) Upward Move Expectations Technically, price trading above 36.58, could see DBS Group retest previous high of 38.55. Both Relative Strength and momentum indicator FFI are supportive of the move. Stop below 35.42 Disclaimers apply

Keppel DC REIT (AJBU): Expect price to trade towards S$2.00

Keppel DC REIT (AJBU) Expect price to trade towards S$2.00 We have observed a decrease in technical supply at the S$1.80 support area during recent trading sessions. Furthermore, a softer interest rate outlook could be advantageous for the Data Centre operator. Consequently, we anticipate the REIT to move towards our initial target of S$2.00, with the potential to reach S$2.20 if it breaks through resistance. Our stop level is set below S$1.72. Disclaimers Apply

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