The current course of the AEX Index
It is Thursday, August 8, and the AEX is at 879 in the morning session. That is 12 points (1.3%) lower than last Friday'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.
After the release of monthly labor figures from the US on Friday afternoon, August 2, panic ensued. The media were full of it and contributed heavily to the recession fears that reigned. Our calculated price target of correction at 870-854 was immediately erased Monday morning with the AEX opening at 849. That day, the AEX also set its weekly low at 840. In several highly volatile trading days, the AEX recovered to 888. Big results, causing the risk-weighted gauge to shoot up like a rocket.
What does this mean for sentiment?
The sentiment that we have been describing for weeks as "the stretch is out for a while" has changed to "fear reigns" due to the stock price movement and the market's interpretation of the numbers. The markets are flooded with panic selling as people fear a hard landing and recession.
What is the expectation of the AEX Index price movement?
The expectation has changed due to the course of the AEX in the past week for the short term.
The algorithm gave a sell (short) signal at 938 and it closed around 855 on Monday. The most likely scenario is a recovery from 840 to 890-895. Then the larger correction is completed and the AEX could drop to 810-800. Given the high volatility, exact values cannot be displayed and we speak of a zone within which the AEX will continue its upward trend. So currently that is in the 810-800 zone.
The major trend is up and the indicated decline is a healthy correction and offers perfect opportunities to buy shares for the longer term. The price target AEX remains at 1025 points.
Back view: read our view of the AEX from August 2, 2024, here
Course movement of the Nasdaq
The Nasdaq futures are currently at 18,000 which is 700 points (3.75%) lower than last Friday's reading.
The Nasdaq futures experienced a similar week to the AEX. Monday's opening was still somewhat not too bad at 18,400 but during the day here too the price target of 18,000 points was widely missed with a weekly low at 17,200 points. Nasdaq futures reached 19,650 on Wednesday, July 31, only to fall 2,500 points (13%) on Monday. The AEX fell more than 9%, proving the Nasdaq to be more volatile.
After the panic sell-off, the Nasdaq also recovered 8%.
What is the expectation of the Nasdaq's stock price performance?
The most likely scenario for the Nasdaq is still very similar to that of the AEX. However, the Nasdaq is more mobile 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 week is that the recovery will end around 18,600 points to then complete the major correction with a price target of 16,500. This is with a run-out to possibly 15,500. Due to the enormous volatility, an exact value is not yet easy to determine but the 16,500-15,500 zone is the price target of the completion of the correction according to the most likely scenario.
Following this, the Nasdaq can resume its strong trend toward the long-term futures price target of 22,900 points.
Below is the chart of the Nasdaq100 -future since January 1, 2024, with the most likely scenario plotted.
As we have been writing for a long time, it is generally true of Stock markets that the trend is strongly upward but that for the short term, the stretch is out 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 12 through August 16:
In the week ahead, we should take into account inflation figures ut the US. On Tuesday the preview with the Producer Price Index and on Wednesday 2:30 p.m. the Consumer Price Index. Friday afternoon we look at US retail sales.
Equity markets are keen to see a smooth and sharp cut in U.S. interest rates. Inflation rates are a very important factor in this. Therefore, inflation should not have increased more than expected. The stock markets will start to react considerably to these figures.
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' insights and experiences. They are therefore for educational purposes only.
