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Apple shares +8% last week

UK 100 – Daily Candlesticks
Source: GKFX / MT4 (August 23, 2020)


UK 100 has been struggling to break above the 50% Fibonacci retracement of the March decline and has broken 3 rising trendlines after each failed breakout.
 

TAKEAWAYS


•    Apple shares surge 5% on Friday to a new record high
•    S&P 500 Reaches another record high
•    US dollar rallies before Jackson Hole Symposium 
•    DAY AHEAD: New Zealand retail sales, Best Buy earnings

 

MARKETS


The S&P 500 finished Friday with a new record high with gains driven by shares of Apple which rose 5%, adding to the $2 trillion valuation. Disappointing August PMI data saw European shares close in the red on Friday. Asian shares fared better amid news that China and the US would discuss the phase one trade deal in the ‘coming days’. However, Alibaba shares dropped after quarterly results.

The US dollar finished Friday well, building on the strength that began late Wednesday after the release of Fed minutes. EUR/USD closed below 1.18 for the first time in 7 days. GBP/USD has been volatile rising and falling over 150 pips for 4 days. 

Gold and silver prices fell but the declines were relatively benign given the strength of the rebound in the dollar, with both metals finishing Friday off their lows. 
 

GURU WISDOM

“October: This is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain
 

Apple +8%


Shares of Apple continue to pick up momentum. This week saw the shares burst above a $2 trillion valuation – the first US company to do so – then surged +5% on Friday to end the week up 8%. The latest surge all seems to be in the run up to the 4:1 stock split scheduled for the end of the month. It would take a brave trader to go short in such a blistering uptrend BUT it’s possible there is a ‘buy the rumour, sell the news’ phenomenon to be seen once the stock split happens.
 

Jackson Hole


Fed minutes caused quite a stir last week; the dollar spiked and stock markets sold off. While stocks were back at record highs by Friday, the dollar strength continued. The Fed did not give the nod to a new dovish shift in policy that many traders who were short the dollar were expecting. According to the Fed minutes “a number” of Fed members thought it would be “helpful” to make a revised statement on its policy strategy but they didn’t say when. 

Some traders have opted to close their dollar shorts, however there is still a net short dollar postion in the market according to COT data. Let’s see if Jerome Powell gives the holdouts what they were waiting for at this week’s Jackson Hole online summit. 
 

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