Morning review：
Dear friends, I am Don Adam Perera, and I am very happy to be with you in this community. Today we will explore the impact of economic data on the stock market and together find the trajectory of the stock market. In this way, we can optimize our investment portfolio and better capture investment opportunities.
1.How do the revised annualized quarterly GDP figures and the initial weekly unemployment claims data look, and what impact do they have on the stock market?
2.The reasons for the pullback in NVDA prices, and my perspective?
3.How are the stocks in our investment portfolio performing, and how should we act?
I will share on these topics.
In the investment market, the direction of policy has a crucial impact on our decision-making, and economic data acts like a barometer for the stock market, indicating immediate market changes and trends. Understanding the interaction between these data and policies is an indispensable part of every investor’s decision-making process.
Today, the market released two important economic indicators: the revised annualized quarterly GDP rate for the second quarter and the initial weekly unemployment claims data.
The revised annualized quarterly GDP rate for the second quarter is a revised estimate of the economy’s growth or contraction during the second quarter, based on more complete and accurate data. This revised GDP rate provides a more accurate assessment of the economic health.
The initial weekly unemployment claims refer to the number of workers filing for unemployment benefits for the first time, which can be used to gauge the health of the labor market.
Today’s released data:
The revised annualized real GDP growth rate for the second quarter has been adjusted upward to 3%, exceeding the earlier forecast of 2.8%. This upward revision shows that the economic growth momentum is stronger than anticipated, which is a positive signal for the stock market. An increase in GDP growth typically indicates enhanced corporate profitability, boosted consumer confidence, and more extensive economic activity. These factors often have a positive impact on the stock market, particularly in sectors closely linked to economic growth, such as consumer goods, technology, and financial services.
As of the week ending August 24, the number of initial unemployment claims was 231,000, slightly below the market expectation of 232,000, and the previous week’s data was revised up from 232,000 to 233,000. This data indicates that the job market has maintained a relatively stable condition.
Based on the analysis above, we can conclude that the data released today has had a positive impact on the stock market overall. Given the current situation, the market environment remains favorable, and we can afford to be patient and wait for further market performance.
Now, let’s turn our focus to the performance of the stocks in our investment portfolio.
First, let’s focus on the market dynamics of NVDA, analyzing its market reaction from the earnings released yesterday: In its third fiscal quarter report, NVDA’s revenue reached $32.5 billion. Although this figure exceeded the average analyst expectation of $31.9 billion, it fell short of the most optimistic market forecast of $37.9 billion. While the results indicate that NVDA’s performance surpassed general expectations, it did not meet the highest market expectations, thus raising concerns about its weakening growth potential and leading to a decline in its stock price.
In the current situation of market panic regarding NVDA’s stock price trend, we should adopt a more rational and analytical approach to examine this issue:
1.Although NVDA’s performance did not meet the highest market expectations, the revenue it actually reported exceeded the average expectations, demonstrating that the company’s performance is quite good.
2.Despite production issues with Blackwell, the company is actively taking steps to improve production processes and increase output. Additionally, NVDA has stated that the supply of the new Blackwell chips will significantly increase, expecting to bring billions of dollars in revenue in the fourth quarter, indicating that the impact on the fundamentals is limited.
3.From a technical analysis perspective, NVDA’s stock price has pulled back to near the middle Bollinger Band (BOLL) and is showing signs of stabilizing. This position is often viewed as a potential support area and represents a watershed between bullish and bearish forces.
Therefore, at this critical moment, we should not feel overly panicked. Instead, this may be the beginning of the stock price stabilizing and preparing to rebound. As investors, we should remain calm, focus on the company’s long-term development potential and market reactions to formulate our investment strategies.
Considering the above views on NVDA’s trend, we have decided to maintain a 10% position and hold for the time being.
For those of you following the cryptocurrency market, you may have noticed that in recent days, cryptocurrency prices have undergone some pullbacks, and the market is currently in a state of fluctuation. MSTR is a stock associated with the cryptocurrency concept, and there are several reasons why we are optimistic about MSTR:
1.The possibility of Federal Reserve rate cuts: If the Fed implements rate cuts, it typically triggers a frenzy among global investors, and the cryptocurrency market is expected to rebound. As a stock closely related to the cryptocurrency market, MSTR and similar stocks will benefit directly.
2.Market performance after the presidential election: Historical statistics show that the cryptocurrency market often exhibits bullish behavior within the year following a presidential election. Therefore, investing in cryptocurrency-related stocks during this period could yield significant returns.
3.From a technical analysis perspective: Currently, MSTR’s price has touched the lower edge of the trend line after a sharp decline, which is often a potential signal for a market rebound. Therefore, we should patiently observe changes at the trend line position to seize possible investment opportunities.
Overall, although there is uncertainty in the short term, from a long-term perspective, cryptocurrencies and their related stocks still hold good investment potential.
Dear friends, I hereby declare: As long as it is a stock shared by the community, I will be responsible for tracking it to the end. Please rest assured that we will also keep good records.
Dear friends, the stock tracking shared above is from New World Asset Management using New World Quantitative 4.0. This tool combines advanced algorithmic trading and quantitative analysis to select top-quality stocks. It represents the perfect integration of advanced algorithm trading and quantitative trading, and will bring more profit returns to all our friends. I firmly believe that New World Quantitative 4.0 will be the lighthouse in our investment journey, illuminating our path forward and leading us into the ranks of financial freedom.
I will gradually share the workings and usage of New World Quantitative 4.0 in my daily shares. I hope all friends pay close attention to our community shares and take good notes. I believe you can also become an expert in the investment field.
Later, I will continue to discuss with all friends how to determine buy and sell points using the “flag pattern” in stock market trends. See you later.
Closing commentary：
Dear member friends, I am Don Adam Perera, and I am very happy to be here with you all to study the changing trajectories of stock prices and explore the direction of the market. At the same time, we are all looking forward to the PCE data that will be released tomorrow, which will provide us with important clues to further explore the possibility of rate cuts.
1.How did the stock market perform today, and how should we act?
2.How are the stocks in our investment portfolio performing, and what should we do?
3.In the current state of the stock market, how should we choose the best buy and sell points when encountering a flag pattern?
I will share on these topics.
First, let’s observe the recent performance of the three major stock indices: the Dow Jones Industrial Average has pulled back after reaching all-time highs but still maintains an upward trend; the Nasdaq Composite is currently experiencing short-term fluctuations, but the overall trend points towards a rebound; the S&P 500 Index has pulled back in the short term after touching all-time highs, but its trend also shows signs of rebounding.
In this market context, especially with the Federal Reserve about to cut interest rates, the overall trend of the three major stock indices is positive. This indicates that, even in the face of short-term fluctuations, as long as the broad market trend remains unchanged, we can confidently hold onto the stocks in our portfolio, awaiting further confirmation signals from the market.
Particularly noteworthy is the PCE data set to be released tomorrow, a key economic indicator that will significantly influence the Federal Reserve’s rate-cut decisions, and thereby affect the future direction of the stock market. Therefore, we need to pay close attention to this data, understand its potential impact on the market, and adjust our investment strategies accordingly.
Let’s now focus on the performance of individual stocks in our investment portfolio: In our portfolio, particularly the gold sector stocks like NEM held in our medium-term strategy, have once again reached new highs today, displaying a very attractive upward trend. This reconfirms that our directional judgement is correct. Whether facing escalating tensions in the Middle East or the upcoming Federal Reserve rate cuts, the gold sector has demonstrated its value and has become a highlight in our investment portfolio.
This situation reinforces our decision to include the gold sector in our medium-term strategy. Gold is often seen as a safe-haven asset; in times of increased global economic or political uncertainty, gold stocks tend to offer the dual benefits of capital preservation and appreciation. Therefore, continuing to hold gold sector stocks is not only a commitment to our investment direction but also a wise choice after a deep understanding of market dynamics.
From the current chart analysis, the stock prices of NVDA, TSLA, and MSTR are all near the middle Bollinger Band, indicating that these stocks are at a critical point in choosing their direction. The PCE data, which will be released tomorrow, is a very important economic indicator and could have a significant impact on the market. Therefore, we have decided to wait for this data to be released before making any further actions.
Despite the recent severe market fluctuations, it does not affect our expectation for a Federal Reserve rate cut, nor does it shake our confidence in the continuing upward trend of the stock market. In the face of market volatility, we need to learn to be patient and wait for clearer market signals. Historical experience tells us that opportunities always favor those investors who are patient and well-prepared.
Therefore, I hope that every friend in our community will stand with me, together facing the challenges of the market, and jointly advancing our journey towards financial freedom.
Today, we will focus on how to use the “flag pattern” to find the best buying and selling points within stock market trends.
The flag pattern is a common price pattern in technical analysis that usually appears after a strong price trend, indicating that the market is taking a brief pause and suggesting that the trend is likely to continue. This pattern often occurs in one-sided or short-term trends, indicating that after a period of rising or falling, the stock price has entered a temporary adjustment phase.
Let’s discuss using MU’s price trend chart from November 2023 to June 2024 as an example: Through analysis, we can see that after a rebound, the stock price undergoes a period of price adjustment. This adjustment is not a signal of trend reversal but is due to temporary selling caused by some investors taking profits. At this time, unstable chips are washed out, and institutional investors may buy again at a lower cost, which is a common strategy in institutional operations.
Therefore, when the price pulls back to key support points such as A, B, C, D, and E and stabilizes at these positions, it usually heralds a strong continuation of the trend. This creates an opportunity for us to re-enter the market, which often then displays a beautiful one-sided trend, resulting in substantial profits.
When facing this pattern, we should closely monitor the stock’s performance at these key support points and patiently wait for signs of price stabilization, which will be an ideal time to enter the market. By using this approach, we can not only better understand the market mechanisms but also find more profit opportunities in the stock market.
Dear friends, through our learning and discussion, you should now understand that in the flag pattern, the best buying point is usually when the stock price pulls back near the key support line. This point is often the ideal time to enter, and it can bring us considerable investment returns.
I hope that today’s share will help everyone gain a comprehensive improvement in professional knowledge and trading skills, build and perfect your own trading system, and enhance your ability in practical trading. This will not only help you secure more robust profits but also increase your adaptability to market changes.
After earning robust profits, you can help us at New World Asset Management by actively promoting and publicizing our services. This not only enhances our company’s market visibility and influence but also helps us accumulate more client resources and expand our asset management scale. This will further demonstrate the value and strength of our community and affirm the professional growth of each community member.
Dear friends, that concludes today’s share. I hope my presentation has been enlightening and practically helpful to you all. Moving forward, I will continue to share more about practical trading methods, and I hope you all continue to stay tuned.
Tomorrow, the PCE data will be released, which will be an important reference for our investment decisions. Let’s all look forward to the results of this key economic indicator and explore wealth opportunities in the stock market. Thank you all for participating today. See you tomorrow.