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Market Insights

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Range Potentially Forms as New Month Begins: Market Trends This Week
David Russell
March 7, 2024

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Sizing Up the S&P 500

  • Potential short-term range on S&P 500:
    • 5057: 2/27 low
    • 5127: 3/4 low of 5127
  • Potential “shooting star” on Monday
  • Potential risks:
    • First outside week since mid-October has begun
    • High on 2nd session of March may open door to negative month.
    • VIX making higher weekly lows
  • Next catalysts:
    • Tomorrow morning: payrolls
    • Tue 3/12: CPI
S&P 500, daily chart, showing key levels and first bars of weeks and months.

Key News:

  • Powell testimony leans dovish but is noncommittal
  • Super Micro Computer (SMCI) replaces Whirlpool (WHR) in S&P 500.
    • Deckers Outdoor (DECK) replaces Zions Bancorp (ZION)
  • Ford Motor (F) EV sales +81% y/y in February
  • Goldman Sachs bearish on EV battery metals (lithium, cobalt, nickel) amid oversupply.
  • Target (TGT) earning beat estimates by 23 percent despite revenue missing by 1 percent. (See Margins below.)
  • Apple (AAPL) nears October lows on weak Chinese sales
  • Bank of America raises S&P 500 target from 5,000 to 5,400, but sees potential pullback.
  • Jonathan Krinsky of BTIG: AAPL weakness may trigger broader pullback

Seven Catalysts for Stock Movement

  1. Volumes: More / less business
    • Measured in units, orders, bookings. These often become revenue
  2. Margins
    • Selling prices rise / input costs fall = wider margins
    • Selling prices fall / input costs rise = narrower margins
  3. Macro trends
    • Economic growth, interest rates, commodity prices
  4. Strategic Actions
    • M&A, buybacks, spinoffs, dividends
    • “Financial engineering”
  5. Credit
    • Effective use of leverage can increase profitability
    • Debt meltdowns can occur when business contracts
    • Changes in interest rates can impact leveraged companies
  6. Business transformation
    • Change in business model, products
    • Example: software transition to subscription model, chipmaker embrace of AI vertical
  7. Investor rotation
    • Typically occurs around quarters, years
    • Can result from changes in six catalysts above

Note: Legal / regulatory risk isn’t included because the issue is typically often associated with catalysts cited above

Signals Scan

  • Best Buy (BBY): Bullish outside day after “golden cross”
  • Amazon.com (AMZN): potential “shooting star” on 3/4
  • Tesla (TSLA): potential downside to $152 if $175 breaks?
  • MGM Resorts (MGM): downside potential after gap lower?
  • Nike (NKE): downside risk to September low under $90?
  • Seagate Technology (STX): bearish outside day

Using the Platform

  • “First bar” PaintBars are available over various time frames: Day, Week, Month, Year
  • On Chart Analysis: Studies → Add Study → PaintBar
  • Spans intraday, daily and weekly timeframes
  • Also available on RadarScreen and Scanner

Upcoming Events

  • Earnings tonight: AVGO, COST, GPS, MDB, MRVL
  • Fri 3/8: Non-farm payrolls
  • Tue 3/12: CPI
  • Wed 3/13: Oil inventories
  • Thu 3/14: PPI, retail sales

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About the author

David Russell is VP of Market Intelligence at TradeStation Group. Drawing on two decades of experience as a financial journalist and analyst, his background includes equities, emerging markets, fixed-income and derivatives. He previously worked at Bloomberg News, CNBC and E*TRADE Financial. Russell systematically reviews countless global financial headlines and indicators in search of broad tradable trends that present opportunities repeatedly over time. Customers can expect him to keep them apprised of sector leadership, relative strength and the big stories – especially those overlooked by other commentators. He’s also a big fan of generating leverage with options to limit capital at risk.