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The Price Action Lab Report-Week of August 21, 2023 [Premium Articles]

Photo by Burak The Weekender

Market analysis for the week of August 21, 2023. Major market indexes, large caps, ETFs, commodities, and forex. Access to the full report requires a Premium Articles or All-in-One subscription.

Report contents

  1. Weekly Summary.
  2. S&P 500 Index Performance.
  3. S&P 500 Index Analysis.
  4. CRB Index Analysis.
  5. Bond Market Analysis.
  6. US Dollar Index and Forex Analysis.
  7. 60/40 Portfolio Performance.
  8. Stocks and ETFs to Watch.

1. Weekly Summary (August 14 – August 18, 2023)

  • Stocks ended the week with losses after strong economic data.
  • Bond yields rose after the release of FOMC minutes.
  • Commodities were down after a sell-off in the energy sector.
  • The US dollar rebound continued for the fifth week in a row.

Due to higher inflation expectations for a longer period and new data releases showing the economy remains robust, stocks ended the week down. The S&P 500 index ($SPX) finished the week with a 2.1% loss, while the NASDAQ-100 ($NDX) dropped 2.2%. The sell-off was broad-based, with the Dow Jones Industrial Average ($DJI) and the S&P 500 low volatility index ($SP5LVI) falling 2.2% and 2.1%, respectively. The S&P 500 high beta index ($SP5HBI) lost 3.4%, and small caps ($RUT) also fell 3.4%.

The 10-year note yield gained eight basis points to 4.25% after making a high at 4.33% on Thursday after the release of the FOMC minutes on Wednesday. The US Treasury Bond Total Return Index fell 0.3% for the week. Commodities ($CRB) were down 1.5%, primarily due to large losses in energy. The US dollar index ($USDX) rose for a fifth week in a row to end the week up 0.5%. The spot price of crude oil (@WTI) fell 2.3%. Gold on the spot market (@GC) was down 1.2% due to a rallying US dollar.

Year-to-date, tech stocks ($NDX) are up 34.3% and down 11.3% from all-time highs. The S&P 500 index ($SPX) has gained 13.8%. Gold (@GC) is up 4.5%, and crude oil (@WTI) is gaining 1.4%. Commodities ($CRB) are down 0.8% for the year.

Our PSI5TF trend-following strategy with 23 futures contracts (long and short) is up 4.8% year-to-date (backtest). The DBMF iMGP DBi Managed Futures Strategy ETF is down 4.3% year-to-date.

2. Chart Of The Week

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Specific disclaimer: This report includes charts that may reference price target levels determined by technical and/or quantitative analysis. No charts will be updated if the market condition changes affect the charts’ levels and/or any analysis based on them. All charts in this report are for informational purposes only. See the disclaimer for more information.

Disclaimer:  No part of the analysis in this blog constitutes a trade recommendation. The past performance of any trading system or methodology is not necessarily indicative of future results. Read the full disclaimer here.

Charting and backtesting program: Amibroker. Data provider: Norgate Data

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