Current AEX Index
.It is Friday, July 26, and the AEX is at 898 in the morning session. That is 15 points (1.6%) lower than last week's reading. Here above is the chart of the AEX as of March 2024. You can see the most likely scenario for this year plotted.
The AEX started the week as expected with a recovery after the sharp decline in the previous week. This led to a weekly high of 922. Then the sharp correction continued and led to a preliminary lowest weekly reading of 890. Currently, the market is recovering from the sharp decline that stock prices suffered mid-week. This afternoon at 2:30 p.m. the inflation figures in the U.S. will be published. This could cause additional movement.
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 equity markets. The underlying sentiment is positive but this period is time for the well-known correction within a trend.
What is the expectation of the AEX Index price movement?
The algorithm has given a sell (short) signal at 938. The initial price target was 896 and it was met with verve. The most likely scenario for the coming weeks is a recovery of about 3% from the weekly low of 890. This means we expect the AEX to recover to the 916 level with a possible run-up to 921. This recovery could take as little as a week.
The correction within the major trend, however, is not yet complete according to our algorithm. After the recovery to around 916, the AEX may finish the correction by falling further to the 873-868 level.
In the most likely longer-term scenario, we can pick up the way up from that level with the unchanged price target of 1025.
Backward look: read our view of the AEX from July 19, 2024
Price movement of the Nasdaq
The Nasdaq futures are currently at 19.100 which is 760 points (3.8%) lower than last week's reading.
The Nasdaq futures, as expected, also set weekly highs early in the week. This was 20,000 points. After that, the expected correction began. The soaring Tech funds took a firm step back. This resulted in a weekly low of 18,900 points for the future. With this, the first price target was reached here as well. Currently, the Nasdaq is recovering from last week's heavy decline.
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 further than that in the AEX.
Specifically, the most likely scenario for the coming weeks is a recovery of about 5% from the low of 18,900. This means a somewhat longer-term recovery that could lead to the 20,000 level. The correction in the major uptrend is not over for the Nasdaq either. After the recovery, in the most likely scenario, our algorithm expects a drop to around 18,000 points.
Following that, the Nasdaq can resume its strong trend towards the adjusted price target of 22,900 points for the future.
Below is the chart of the Nasdaq100 -future since June 2024 with the most likely scenario plotted.
Important items on the economic calendar for the week of July 29 to August 2:
The week ahead revolves around the FED's meeting at 8 p.m. on Wednesday. In it, US interest rate policy will be announced.
On Friday at 2:30 p.m., the monthly Labor figures from the U.S. will be released.
Both events will cause volatility in equity markets.
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.