Morning review：
Dear friends, I am Don Adam Perera, and I am thrilled to be here with all of you in our community today. Today we will analyze the impact of economic data on the market, delve into the trajectories of the stock market, and identify the most suitable wealth opportunities for us to engage in, together achieving steady growth in our wealth.
1.How does economic data impact the stock market?
2.How are the stocks in our investment portfolio performing, and how should we operate?
I will be sharing content on these topics.
In the world of investing, policy is a major guide, and economic data is the barometer of the investment market. These data not only reflect the current state of the economy but also indicate future market trends. Therefore, understanding and analyzing these key economic indicators is crucial for us to formulate effective investment strategies.
Today, I will focus on economic data along with all the community friends: August ADP employment numbers; initial jobless claims for the week ending August 31; and the August ISM Non-Manufacturing Index.
Now let us step-by-step analyze these key economic data, so we can better find suitable wealth opportunities for our trading.
ADP employment numbers: Reflect the number of new jobs created in the private sector. Because it provides insights into labor market trends and economic health before the release of government data, it is highly valued by economists and investors.
Initial jobless claims for the week: The number of people who filed for unemployment benefits for the first time during a specific week. This is a key economic indicator reflecting the health of the labor market.
The ISM Non-Manufacturing Index, also known as the ISM Services Index, is an economic indicator released by the Institute for Supply Management (ISM) that measures the economic activity in the non-manufacturing (services) sector. It reflects the health of the service industry, including multiple sectors such as retail, finance, real estate, healthcare, education, and more.
The latest economic data presents the current state of the labor market. August’s ADP employment figures show an increase of 99,000 jobs, which is the lowest growth since January 2021, clearly indicating that labor market growth is slowing. Despite the private sector’s job growth slowing for the fifth consecutive month, we still see stable wage growth, suggesting that while the job market is decelerating, it is not completely stalling.
The latest unemployment benefits data shows that for the week ending August 31, the number of initial claims for unemployment insurance was 227,000, slightly below the market expectation of 230,000, and a decrease from the previous week’s revised figure of 232,000. Although the change is minor, it somewhat alleviates market concerns about a worsening job market.
These data provide important clues about the current economic condition. A slowdown in the labor market could lead to reduced consumer spending, which in turn affects economic growth and corporate earnings. However, stable wage growth and a slight decrease in the number of unemployment benefit claims offer some reassurance to the market. Overall, the stock market is expected to continue its volatile performance.
The VIX trend is inversely related to stock indices.
In the 15-minute VIX chart, the price shows a volatile pattern with no significant fluctuations, indicating that investor sentiment is relatively stable, which is favorable for the healthy performance of the current stock market.
Currently focusing on the performance of the three major stock indices: The overall trend direction of the Dow Jones Industrial Average, Nasdaq Composite, and S&P 500 is all positive, with all indices showing an upward trend. This is a very positive signal.
Moreover, with the Federal Reserve about to start cutting interest rates, this will have a very positive impact on the entire stock market. Lower interest rates typically mean reduced costs of capital, which will encourage more investment into the stock market, thus driving the indices higher. Therefore, even if the market may experience temporary pullbacks, this will not have a fundamental negative impact on our investment portfolio.
Therefore, for those currently holding stocks, there is no need to be overly concerned about short-term fluctuations. Instead, this may be a good opportunity to strengthen or adjust your holdings to better take advantage of the market’s upward trend in the future.
Now focusing on the stocks in our investment portfolio: The trend for NVDA has already reached a position of stabilization and rebound. We need to pay special attention to its price movement direction, especially the resistance levels at the yellow and white lines. Once NVDA successfully breaks through these two key resistance points, we can anticipate that the stock will enter a new phase of unilateral upward trend.
Currently, NVDA’s price action suggests that it may be forming a “W” pattern reversal. This pattern is often viewed as a strong bullish signal, especially once the “W” pattern is confirmed and stabilizes. This signifies strong buying momentum and potential for an increase. Therefore, if the price now shows signs of stabilization, this would be an ideal buying opportunity.
Today, TSLA’s market performance was very prominent, successfully breaking through the critical white resistance line. This action fully displayed the bullish strength and firm determination to rise within the market. This not only brought considerable profit returns to those who held on to TSLA but also increased our confidence and expectations for TSLA’s future profit potential.
This breakthrough by TSLA is an important market signal, indicating investors’ optimism about the company’s future growth potential. It may attract more attention from investors and an influx of capital. Based on the current trend, we choose to continue holding and waiting.
The trend direction has not changed, and the current severe fluctuations in the stock market are creating better buying opportunities for us, perfectly validating the theory that “market opportunities are created through downturns.” Therefore, our current goal is not only to achieve steady growth in wealth but more importantly, to thoroughly understand and master the workings and usage of the New World Quantitative 4.0 investment decision system and apply it in real trading scenarios.
The existence of the New World Quantitative 4.0 investment decision system is to help all friends in our community build and perfect their own investment systems. It has become a guiding light in the investment world, illuminating our path forward. This system embodies the wisdom and effort of numerous top experts, analyst teams, and R&D teams, and even incorporates my own spirit, ultimately resulting in a perfect combination of high-level algorithmic trading and advanced quantitative trading.
New World Quantitative 4.0 covers multiple areas including the stock market, options, bonds, gold, and cryptocurrencies. It can filter out crucial market information for our trading by integrating big data and, based on this information, develop more detailed asset allocation plans for our friends. Currently, the success rate of New World Quantitative 4.0 has reached 89%, which is a very encouraging figure.
I have integrated the workings and usage methods of New World Quantitative 4.0 into our daily community knowledge sharing, and I believe that friends in the community have begun to gradually understand and master the use of New World Quantitative 4.0. Through such learning and application, we will be able to more accurately seize investment opportunities and optimize our investment decisions.
This time, New World Asset Management, in an effort to further increase our market visibility and influence and to expand our customer base and asset management scale, has specially organized the 10th session of the New World Quantitative 4.0 Financial Investment Training Class. This training is designed to comprehensively enhance the professional knowledge and trading skills of our community friends through systematic education and practical exercises, strengthening their practical trading capabilities.
Our goal is to develop top performers in the financial investment market, helping them to achieve above-average profit returns in real-world scenarios. Through the success stories of participants, we hope to effectively promote and publicize New World Asset Management, further enhancing our market visibility and attractiveness.
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In the meantime, please be sure to keep this book safe. It is not only a tool for us to learn, but also a witness of our common growth, and in the future this book will also open the door for us to meet each other. Let’s cherish this gift together and look forward to meeting you face-to-face at a live event in the near future.
For those of you who are new to the community, if you haven’t picked up this book yet, please contact my assistant directly to sign up and pick it up. This book will serve as your first asset in joining our family, and I believe it will play an important role in your investment journey.
Later, I will continue to share with friends the method of buying strong stocks during sideways breakouts in stock market trends. See you later.
Closing commentary：
Dear friends, I am Don Adam Perera, and I’m thrilled to be here with you all in our community today. Together, we’ll explore the implications of the economic data released today and optimize our investment portfolios to prepare for the important non-farm data release tomorrow.
1.What are the service sector PMI figures released by ISM, and what is their impact on the stock market?
2.What are the key considerations in current operations?
3.What is the buying method for a breakout in a sideways trend in the stock market?
I will be sharing content on these topics.
According to today’s report from the Institute for Supply Management (ISM), economic activity in the services sector expanded for the second consecutive month in August, with the Service PMI registering at 51.5. This indicates that the services sector has expanded in six of the eight months of 2024. This data once again confirms that the economy is enjoying strong growth momentum in the third quarter, which provides a solid foundation for the upcoming rate cuts by the Federal Reserve and creates favorable conditions for the operation and development of the entire investment market.
Additionally, the focus of global investors is on tomorrow’s release of the non-farm payroll data, which will serve as a crucial reference for the Federal Reserve’s rate-setting meeting and determine the scope and pace of the Fed’s rate cuts. Therefore, tomorrow’s non-farm data could potentially decide the direction of stock market trends, which is critical for our investment decisions. I urge all friends to pay close attention and be well-prepared to ensure that we can maintain an advantage in any market fluctuations.
Currently, TSLA and NVDA are showing very similar overall trading trends.
Today, TSLA announced significant news, planning to launch its Full Self-Driving (FSD) system in the Chinese and European markets by the first quarter of 2025. Influenced by this, TSLA’s stock price experienced a strong rebound, not only challenging the white resistance line but also successfully stabilizing above it, which clearly demonstrates the bulls’ strong determination to counterattack. Currently, TSLA’s trend has formed an irregular “W” shape. Once the neckline at point C is successfully breached, we have every reason to believe that TSLA will see greater profit potential. Therefore, we choose to continue holding and wait to observe future market trends and seize possible profit opportunities.
NVDA’s current trajectory indicates that it is showing signs of stabilizing and rebounding near the support line. Going forward, we need to closely monitor NVDA’s relative position to the yellow and white lines. Once the price successfully breaks through these two key resistance lines, we have reason to believe that NVDA will experience a new round of price rebounds.
Additionally, NVDA’s price trend is gradually forming an irregular “W” shape. Once this pattern is confirmed, it suggests that NVDA may start a new upward trend. Therefore, we advise those holding NVDA to continue to be patient, wait for further confirmation from the market signals, and seize potential profit opportunities.
Currently, the global investors’ market focus is set to shift to the non-farm payroll data being released tomorrow. This key economic indicator is not only a focal point for all of us, but it could also likely determine the near-term trends in the stock market. Therefore, I hope everyone can remain patient and wait for the release of the non-farm data.
In facing the current investment environment, I firmly believe that having sufficient capital is our primary concern. In the world of investing and trading, capital is not only the foundation of our operations, but it is also the key tool for achieving our investment goals. Only when we have sufficient capital can we participate in the market at the right time and at the appropriate scale, allowing us to effectively diversify risks and enhance the flexibility of our operations.
Therefore, in the process of trading, we must pay special attention to the management and preparation of capital. This is not just about accumulating funds, but also about the prudent allocation and risk control of capital. Through effective capital management, we can ensure that we seize opportunities during market lows and avoid excessive risk exposure during market peaks.
In practical terms, this means we need to continually assess our financial situation to ensure we have ample funds before making investments and to develop strategies to deal with market fluctuations. By doing so, we not only protect our capital but also can act quickly and effectively when the market presents good opportunities.
Overall, having sufficient capital is key to accumulating wealth. It enables us to actively participate in the market, achieve our financial goals, and ultimately succeed in this complex and volatile financial environment.
Additionally, continual learning is an essential path to success. Now, let’s begin our investment learning journey for today. I will be focusing on sharing a key strategy in the stock market with you—how to buy during a sideways breakout in stocks. This is not just a process of learning skills; it is also a journey of our collective growth.
1.What is a sideways breakout?
A sideways breakout refers to when the price of a stock or other asset fluctuates around a horizontal range for a period without a clear upward or downward trend, but subsequently, the price breaks through this sideways consolidation area. This type of sideways movement typically indicates that market participants are waiting for clearer directional signals.
When a sideways breakout occurs, it often signifies that the market has made a new trend decision, which could be either upward or downward.
2.A sideways breakout signal can indicate the continuation of a trend, meaning that after a breakout, the market typically continues in the direction of the breakout. Once the breakout is confirmed, prices may accelerate towards the new direction.
3.As shown in the chart: TSM’s price trend from April to November 2020.
From the chart pattern, we can observe that the price experienced relatively narrow fluctuations during this period. This oscillation pattern is a manifestation of sideways consolidation, which typically occurs when there is a strong sentiment of market indecision.
It’s particularly noteworthy that once this sideways consolidation pattern is broken, as indicated at points E and F in the chart, such a breakout usually means that the market has chosen a new direction. In the case of TSM, after successfully breaking above the upper edge of the sideways pattern, the price quickly entered a phase of standard unilateral uptrend. This rapid rise following the breakout reflects strong buying pressure in the market, providing an ideal buying opportunity.
Therefore, a sideways breakout is not just a technical signal, but also a powerful market dynamic indicator, signaling the start of a potential trend.
Today, I shared with you the method to identify sideways breakouts, hoping you can find similar chart patterns in the market and apply these theoretical insights to your actual trading to validate them. This approach of combining theory with practice embodies the teaching philosophy of our 10th session New World Quantitative 4.0 financial investment training class—“Theory + practice is the best way to enhance practical skills.”
Thank you to all the friends in the community for your active participation today. Please continue to maintain this enthusiasm, actively engage in discussions within the community, and share your needs and questions. Remember, we are a team, and through collective effort and continuous learning, we can grow together in every market challenge.
Today’s session comes to an end, and I hope everyone will diligently organize their daily study notes, grasp the essence of combining theory with practical application, and apply the strategies learned to actual operations.
Tomorrow, we will face the release of the non-farm payroll data, and we expect significant price fluctuations in the market. Let’s continue to meet in the community to jointly face the upcoming opportunities and challenges. I look forward to walking with you through each step of the market. See you tomorrow.