The current course of the AEX Index
It is Friday, August 2, and the AEX is at 891 in the morning session. That is 7 points (0.8%) lower than last week's reading. As expected, the AEX recovered in the first half of the week. On Wednesday morning, the index set its weekly high at 927. This brief outlier was caused by good news for heavyweight ASML. ASML's 10% higher opening caused the AEX to rise about 15 points. As of Wednesday morning, the AEX resumed its correction by falling 4% from the weekly top.
This afternoon at 2:30 p.m., the monthly labor figures from the U.S. will be released. These figures will still cause volatility and may determine price movements in the coming days.
Above is the chart of the AEX over the past month. You can see the most likely scenario for this year penciled in.
What does this mean for sentiment?
The sentiment we have been describing for weeks was confirmed last week; the stretch is out for a while. The markets are switching back for a while and catching their breath. All this is within a nice uptrend in the stock markets. The underlying sentiment is positive but in this period it is time for a well-known correction within a trend.
What is the expectation of the AEX Index price movement?
The expectation has remained unchanged due to the course of the AEX over the past week.The algorithm has given a sell (short) signal at 938. The initial price target was 896, which was more than met last week. The recovery indicated last week has now also been neatly completed. The most likely scenario for the coming weeks is the continuation of the correction within the uptrend. This correction has an unchanged price target of 873-868.
In the most likely longer-term scenario, The potential for a bullish trajectory remains strong as we anticipate a rebound from this level, aiming for the unchanged price target of 1025.
Backward look: read our view of the AEX from July 26, 2024 here
Course movement of the Nasdaq
The Nasdaq futures are currently at 18,700 which is 400 points (2.1%) lower than last week's position.
The Nasdaq futures continued their recovery in the first half of the week as expected. The weekly high was set Wednesday at 19,700. As with the AEX, at that point, the Nasdaq futures completed the indicated recovery and resumed the correction. The Nasdaq has experienced a 5% decline since Wednesday.
What is the expectation of the Nasdaq's stock price movement?
The most likely scenario for the Nasdaq is still very similar to that of the AEX. However, the Nasdaq is more volatile and the upward trend in the Tech sector is more powerful so the price rise will be more extensive than that in the AEX.
Specifically, the most likely scenario for the coming week is the continuation of the decline to the price target of 18,000. The ride from the current 18,700 level to the price target will be interrupted by slight recovery movements. Then the Nasdaq can resume the strong trend towards the adjusted price target of 22,900 points for the future.
Below is the chart of the Nasdaq100 futures over the past month with the most likely scenario plotted.
In general, for equity markets, the trend is strongly up but for the short term, the stretch is off for a while. This requires some patience and presents opportunities for the long term.
Important items on the economic calendar for the week of August 5 through August 9:
In the coming week, we do not expect any important macroeconomic figures or events. On Monday, the most important figure of the week is expected to be released; The US service sector purchasing managers' index.
Disclaimer: Investing involves risk. Our analysts are not financial advisors. Always consult an advisor when making financial decisions. The information and tips provided on this website are based on our analysts' own insights and experiences. They are therefore for educational purposes only.
