Coil evolution AEX Index
It is Wednesday, August 14, and the AEX is at 888 in the afternoon session. That is 9 points (1%) higher than last Thursday's reading.
After the price violence of the previous week, equity markets experienced a relatively quiet recovery week. Investors awaited the inflation figures published at 2:30 p.m. Wednesday afternoon. Until then, the AEX continued to move around the 885-890 level.
Today's high was set at 892. After the release of the slightly disappointing inflation figures, the AEX fell half a percent. Here is the chart of the AEX since February 1, 2024. You can see the most likely scenario for this year plotted.
What does this mean for sentiment?
Sentiment in equity markets can be described as "calm after the storm" and "calm before the storm." It is calm but there is a subcutaneous fear among investors of another big wave of selling due to increased recessionary fears.
What is the expectation of the course of the AEX Index?
The algorithm is neutral on the AEX. The most likely scenario is unchanged from last week. While the expected recovery from 840 to 890-895 has happened, it is currently unclear whether the AEX will continue for a while to the 905 level or whether the recovery has already been completed. This will become clear in the short term, but currently the neutral position for the short term is the best.
The algorithm does give a most likely scenario of a fall from the 885-905 zone to 810-800 for the next few weeks. But as mentioned, there is no valid sell signal now.
The major trend is up and the indicated decline is a healthy correction and offers perfect opportunities to buy shares for the longer term. AEX price target remains 1025 points.
Back view: read our view of the AEX from August 8, 2024
Coil movement of the Nasdaq
The Nasdaq futures are currently at 19,050 which is 1,050 points (5.8%) higher than last Thursday's reading.
The Nasdaq futures rebounded strongly over the past week. From its lowest level at 17,300 (Aug. 5), the price rose 11% in just eight days. With this rise, the Nasdaq is making up for the entire price decline that had begun on Friday, Aug. 2. The Nasdaq is strong and volatile, as last week proved.
What is the expectation of the Nasdaq's stock price performance?
Because of the very high risk, the algorithm is neutral on the Nasdaq.
The Nasdaq, in the most likely near-term scenario, has already completed the recovery and may continue the correction from the current level and finish at the 16,500 level. Following this, the Nasdaq can pick up the strong trend again towards the long-term price target of 22,900 points for the future.
Below is the chart of the Nasdaq100 -future since February 1, 2024 with the most likely scenario plotted.
Important items on the economic calendar for the week from Aug. 19 to Aug. 23:
No very important macroeconomic figures will be released in the coming week. Thursday afternoon at 3:45 p.m., the monthly Purchasing Managers' Index for both services and manufacturing will be released from the US. These figures could cause additional movement in financial markets if there is a solid deviation from expectations.
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.
