The current course of the AEX Index

It is Friday, August 30, and the AEX is at 922 in the afternoon session. That is 15 points (1.6%) higher than last week's reading.  Above you will find the chart of the AEX since January 1, 2024. You can see the most likely scenario for this year plotted.

The AEX started the week hesitantly with fluctuations between 905 and 910. As in the previous week, the AEX broke out on Thursday and reached the weekly high at 923. The main events were the Nvidia figures on Wednesday night and the core US inflation figures released this afternoon. Nvidia had great numbers but its outlook was still not met with applause by investors. The stock dropped from $125 to $117 (minus 6.5%).

The inflation figures may be more interesting. Annual core U.S. inflation was 2.6% in July, 0.1% lower than expected. Inflation is declining so the Fed may start cutting interest rates. Good for equity markets. However, people also fear a hard landing for the economy. Decreasing inflation rates indicate a gradual slowdown in economic activity. In the current state of the U.S. economy, recession fears still hover over the market and dominate. Lower inflation figures are therefore processed slightly negatively by the markets.

All eyes are on next Friday because that is when the very important monthly labor figures in the U.S. will be released. Last month's figures triggered panic selling and the AEX fell to 840.

What does this mean for sentiment?

Market sentiment in equities has shifted towards a more positive outlook, thanks to the robust recovery that has been observed. A strong rise soon makes one forget the previous decline. The situation at present can be described even more strongly than last week as "make or break."

What is the expectation of the course of the AEX Index?"

The algorithm is completely neutral on the AEX due to high uncertainty. Due to the high volatility at the time of the decline at the beginning of this month, we are also seeing larger-than-expected breakdowns in the recovery. The recovery from the 840 to the 923 is powerful but remains a recovery after a larger decline.

Note that the position is neutral for a reason. As reported, the AEX is moving into the Make or break zone. Specifically, this means that the algorithm is up against a vision change. Namely, if the AEX sets an initial top around 925-930 and then stabilizes and after that closes above this zone, the algorithm will in all likelihood assume that the correction has been completed and that the AEX will start the ride from there to the price target at 1025. It is not that far but we should mention that a change in the preferred scenario may be coming.

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 23, 2024, here

Course movement of the Nasdaq

The Nasdaq futures are currently at 19,530 which is 150 points (0.8%) lower than last week's reading.

The Nasdaq futures have recovered very strongly in recent weeks from the big drop earlier this month. Over the past week, the futures are quietly hovering slightly lower between 19,100 and 19,800, following the path indicated by the algorithm earlier.