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The S&P 500 Reached 5400+, but the Bears Are Still Hibernating
By: Dr. Arnout Ter Schure | July 2, 2024
• The rally from the May 31 low extended beyond the standard Fibonacci-based targets and, contingent on holding above $5325, can target $5600, which market breadth and Seasonality support.
Standard vs. Extended
We primarily track the S&P 500 (SPX) using the Elliott Wave Principle (EWP). In our last update, see here, we viewed the current rally from the May 31 $5191 low as an impulse 5th wave targeting ideally $5427-53, based on a standard Fibonacci-based impulse pattern. See Figure 1 below.
Figure 1. Hourly SPX chart with detailed EWP count and technical indicators
However, the index extended beyond the standard Fib-based pattern and has essentially gone sideways for the past eleven trading days. Thus, as stated in our previous update
“Namely, the rally from the April 19 $4953 low could see one more W-4, 5 sequence. Instead of a ~10% correction from the ideal $5427-53 target zone, we could only be treated with a single-digit pullback to around $5260+/-15 for the potential W-4, followed by a last W-5 to ~$5550+/-25. It will require a drop below last week’s low from the ideal $5427-53 target zone to strongly suggest a deeper correction is underway.”
Figure 1 has colored dotted horizontal lines at key price levels, which are warning levels for the Bulls. Blue is the Bulls’ 1st warning, grey the 2nd, etc., and if the index drops below them, it increases the odds that the upside target will not be reached. Hence, they can be used as stop (loss) levels. Thus, as the rally extended, we raised those levels. The index will have to drop below $5325, the orange warning level, to strongly suggest a larger correction is underway.
Market Breadth and Seasonality
Moreover, the daily McClellan Summation Index (SPXSI), a market breadth indicator, is already getting oversold (see Figure 2 below), which suggests the path of least resistance is back up. That means improving breadth, which tends to equate to higher index prices. So far, the SPX has “suffered” a stealth correction: moving higher on decreasing breadth, as it did earlier this year (blue dotted lines). The former case was resolved higher.
Figure 2. Daily Summation Index for the SPX
Lastly, we can look at seasonality. Here, we assess only the average path the index has taken during the US Presidential Election Years (see Figure 3 below). It follows that, on average, an important low is struck in late June, July sees more of a consolidation, and August will be the real deal.
Figure 3. Average Seasonality in an Election Year for the SPX.
However, we must be cognizant of the fact that this is an average and thus not set in stone. It’s a great potential road map we can track. When the market deviates from it, we should no longer rely on it. However, for now, it is working as the SPX bottomed last week.
In conclusion, although some charts suggest we should look higher, price is always the final arbiter. However, the Bears have so far been unable to break price below even the 1st raised warning level, and if the index can stay above $5400, and especially $5325, we see no reason to turn Bearish.
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S&P 500 Earnings Results Are In for 2024 Q1 and Market Is Still Overvalued
By: Carl Swenlin | July 2, 2024
S&P 500 earnings are in for 2024 Q1, and here is our valuation analysis.
The following chart shows the normal value range of the S&P 500 Index, indicating where the S&P 500 would have to be in order to have an overvalued P/E of 20 (red line), a fairly valued P/E of 15 (blue line), or an undervalued P/E of 10 (green line). Annotations on the right side of the chart show where the range is projected to be, based upon earnings estimates through 2025 Q1.
Historically, price has usually remained below the top of the normal value range (red line); however, since about 1998, it has not been uncommon for price to exceed normal overvalue levels, sometimes by a lot. The market has been mostly overvalued since 1992, and it has not been undervalued since 1984. We could say that this is the "new normal," except that it isn't normal by GAAP (Generally Accepted Accounting Principles) standards.
We use GAAP earnings as the basis for our analysis. The table below shows earnings projections through March 2025. Keep in mind that the P/E estimates are calculated based upon the S&P 500 close as of March 29, 2024. They will change daily depending on where the market goes from here. It is notable that the P/E is outside the normal range.
The following table shows where the bands are projected be, based upon earnings estimates through 2025 Q1.
This DecisionPoint chart keeps track of S&P 500 fundamentals, P/E, and yield, and it is updated daily -- not that you need to watch it that closely, but it is up-to-date when you need it.
CONCLUSION: The market is still very overvalued and the P/E is still well above the normal range. Earnings have ticked down, but are projected to trend higher for the next four quarters. Being overvalued doesn't require an immediate decline to bring valuation back within the normal range, but high valuation applies negative pressure to the market environment.
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$SPX $SPY - A 'Right Angled & Ascending Broadening' Pattern (Blue) With 4Hr 50/EMA as Spprt. Needs to overcome its 11/21 EMA's first...
By: Sahara | July 2, 2024
• $SPX $SPY - Latest
Still mincin above the Bear' Wedge'. Seeing a lot of chop-n-slop and have identified a different plot.
A 'Right Angled & Ascending Broadening' Pattern (Blue) With 4Hr 50/EMA as Spprt. Needs to overcome its 11/21 EMA's first...
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July Best S&P & NASDAQ Month Last 21 Years
By: Almanac Trader | July 2, 2024
Dynamic trading often accompanies the first full month of summer as the beginning of the second half of the year brings an inflow of new capital. This creates a bullish beginning, middle, and a mixed second half.
On average, over the last 21 years, nearly all of July’s gains have occurred in the first 13 trading days. Once a bullish day, the last trading day of July has had a bearish bias over the last 21 years. In election years since 1950, July has tended to be a dull month filled with choppy trading.
Trading on the day before and after the Independence Day holiday is often lackluster. Volume tends to decline on either side of the holiday as vacations begin early and/or finish late. Since 1980, DJIA, S&P 500, NASDAQ and Russell 2000 have recorded net losses on the day after.
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Markets Monthly Pattern »» Watchlist - Top 10
By: Marty Armstrong | July 2, 2024
• Dow Jones Industrials Index »» New Pattern Forming
• NASDAQ Composite Index »» Holding Support
• NASDAQ 100 Index »» Still Breaking-Out
• S&P 500 Index »» Possible High Close
• Russell 2000 Index »» Holding Support
• US Dollar Index »» New Pattern Forming
• CBOE VIX Index »» New Pattern Forming
• NY Gold Futures »» New Pattern Forming
• NY Silver COMEX Futures »» New Pattern Forming
• NY Crude Oil Futures »» New Pattern Forming
Tech call buys and put sells flooding in
By: Cheddar Flow | July 2, 2024
• Tech call buys and put sells flooding in
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$SPY $3.8 Million OTM Call (Very Unusual)
By: Cheddar Flow | July 2, 2024
• $SPY $3.8M OTM Call (Very Unusual)
This print has the July expiration and was bought to open (Vol>OI)
*Above the Ask*
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July Almanac: DJIA, S&P 500, NASDAQ Up 9 Straight
By: Almanac Trader | July 1, 2024
July historically is the best performing month of the third quarter, however the mostly negative results in August and September tend to make the comparison easy. “Hot” Julys in 2009 and 2010 where DJIA and S&P 500 both gained greater than 6% combined with strong performances in 2013, 2018, and 2022 have boosted July’s average gains since 1950 to 1.4% and 1.3% respectively.
DJIA, S&P 500, NASDAQ and Russell 1000 have been up nine straight Julys (2015-2023). Russell 2000 has been up seven times in the same period (down in 2015 and 2021). Such strength inevitability stirs talk of a “summer rally”, but beware the hype, as it has historically been the weakest rally of all seasons (page 74, Stock Trader’s Almanac 2024).
July begins NASDAQ’s worst four months but is also the sixth best performing NASDAQ month since 1971, posting a 0.9% average gain. Dynamic trading often accompanies the first full month of summer as the beginning of the second half of the year brings an inflow of new capital. But the best month of Q3 is weaker in election years.
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$SPY $2.3 Million Far OTM Put This is likely a hedge due to the strike
By: Cheddar Flow | July 1, 2024
• $SPY $2.3M Far OTM Put
This is likely a hedge due to the strike
There's been an unusual uptick in OTM SPY puts recently
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With 2Q24 Earnings Due To Start Shortly, Large-Cap Indices Give Out Signs Of Fatigue
By: Hedgopia | July 1, 2024
The June-quarter earnings season is upon us, and US equity indices increasingly are giving out signs of fatigue. Halfway through, they have already rallied mid- to high-teen percent this year. Digestion of these gains is the path of least resistance in the weeks and months ahead. Equity bears have an opening.
The 2Q24 earnings season begins in earnest next week as the leading banks including JP Morgan (JPM) report their books.
In June alone, consensus estimates for S&P 500 companies were cut by $0.53 to $58.17, with a drop of $0.36 in the 10 days through last Thursday (Chart 1). The sell-side expected as high as $60.63 last August before bringing out the scissors. This has been the established norm.
These analysts start out optimistic and begin revising their numbers lower as the year progresses and as the quarter nears. For reference, these companies brought home $54.63 in the March quarter; this compares to expectations of $57.45 in May last year.
Ahead of this, the S&P 500 hovers near its highs. The large cap index has had a phenomenal first half. Through last Friday’s new intraday high of 5524, it was already up 15.8 percent year-to-date.
Amidst this, there are signs rally fatigue is beginning to set in.
Last Friday’s fresh high came in a reversal session, with the index ending at 5460, down 0.1 percent for the week. This was the first down week – albeit nominal – in four and second in the last 10. Post-last October’s bottom, except for minor selling in March-April – down 5.9 percent – it has been straight up, with RSI divergence on the weekly, indicating slowing momentum.
Last week, a gravestone doji formed on the weekly, preceded by a weekly candle leaving behind a long upper shadow (Chart 2). Bears have an opportunity to press.
Immediately ahead, the June 12th gap-up gets filled at 5370s.
The Nasdaq 100, which is dominated by large-cap tech companies, acts the same way. It, too, reached a new intraday high last Friday – 20018 – only to reverse hard lower to end the session at 19683, down 0.1 percent for the week, forming a weekly spinning top. This was preceded by a weekly gravestone doji.
It seems tech bulls increasingly are coming under temptation to lock in gains. At Friday’s high, the Nasdaq 100 was up 1.6 percent, all of which – and then some – was given back. Through that high, it was up 19 percent for the year. From last October’s bottom, the index was up 42.4 percent. These are heady gains and have come without much of a correction. Time is ripe for one.
Immediately ahead, the June 12th gap-up gets filled at 19200s.
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Since 1950, when the S&P 500 index has made 20 or more all-time highs by mid-year, the full year has been positive 100% of the time, with an average of 20 new all-time highs in the second half
By: Isabelnet | July 1, 2024
• S&P 500
Since 1950, when the S&P 500 index has made 20 or more all-time highs by mid-year, the full year has been positive 100% of the time, with an average of 20 new all-time highs in the second half.
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The 10 Top/Bottom S&P 500 Index percent net change performers
By: Thom Hartle | July 1, 2024
• Today (8:34 CST), the 10 top/bottom percent net change performers in the S&P 500 Index.
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The 10 Top/Bottom NASDAQ 100 Index percent net change performers
By: Thom Hartle | July 1, 2024
• Today (8:34 CST), the 10 top/bottom percent net change performers in the NASDAQ 100 Index.
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Here's how the largest S&P 500 stocks performed during Q2
By: Evan | July 1, 2024
• Here's how the largest S&P 500 stocks performed during Q2
Microsoft $MSFT +6.2%
Apple $AAPL +22.8%
Nvidia $NVDA +36.7%
Google $GOOGL +20.7%
Amazon $AMZN +7.1%
Facebook $META +3.8%
Berkshire Hathaway $BRK.B -3.3%
Eli Lilly $LLY +16.4%
Broadcom $AVGO +21.1%
Tesla $TSLA +12.6%
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Best performing S&P 500 stocks from Q2
By: Evan | July 1, 2024
• Best performing S&P 500 stocks from Q2
Nvidia $NVDA +36.7%
First Solar $FSLR +33.6%
Teradyne $TER +31.4%
GE Vernova $GEV +25.4%
Vistra $VST +23.5%
Apple $AAPL +22.8%
Netapp $NTAP +22.7%
Monolithic Power $MPWR +21.3%
Broadcom $AVGO +21.1%
Arista $ANET +20.9%
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Worst performing S&P 500 stocks from Q2
By: Evan | July 1, 2024
• Worst performing S&P 500 stocks from Q2
Walgreens $WBA -44.2%
Builders $BLDR -33.6%
$EPAM -31.9%
Estee Lauder $EL -31%
Intel $INTC -29.9%
Globe Life $GL -29.3%
Paycom $PAYC -28.1%
Global Payments $GPN -27.7%
Molina $MOH -27.6%
Albemarle $ALB -27.5%
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Short Interest Spiking as Stocks Enter Historically Bullish Month
By: Bruce Powers | July 1, 2024
• July is a historically bullish month, but be ready for a rotation out of Big Tech
• S&P 500, Nasdaq short interest exposure is nearing five-year highs
The US equity gauge is poised to plunge to 4,200 by year-end, a roughly 23% drop from Thursday’s close around 5,483, the bank’s chief market strategist and his team said Friday in a mid-year outlook. It surpassed the 5,500 mark in early trading Friday after a key measure of US inflation showed signs of cooling.
-Bloomberg via Yahoo Finance, June 28, 2024
Last week we discussed strategist price targets for year-end on the S&P 500 (SPX – 5,460.49) and how reserved their upward revisions have been. I thought I'd share the latest. JP Morgan's top strategist is sticking steadfastly to his target, which is that the index will plummet in the second half of the year. That's a bold bet to make -- after all, equity markets during election years since 1950 have only been negative three times.
The SPX closed lower on Friday and flat for the week, with month and quarter-end volatility reversing the session's opening gap higher. The reversal produced a gravestone doji candle on the weekly timeframe, potentially indicative of an impending turnaround. The SPX is also stalling at the 5,500 level and 161.8% Fibonacci extension from the April sell-off, but sometimes that's just it; a stall, not a rug pull. There is a small call wall on the SPDR S&P 500 ETF Trust (SPY—544.22) at 550, but it's a manageable wall that could easily be taken out, plus nothing sticks out as a clear lid on price action and stacked put levels just below that could act supportive into July OPEX. With most bearish signals getting quickly invalidated this year, it's hard to hang your hat on a few data points with markets still clearly in an uptrend.
To that point, June went out at another new monthly closing high and broke away from the prior 3-month range highs in the S&P 500. That's certainly not bearish price action. On top of that, the index is only a smidge away from a 161.8% Fibonacci extension from the 2022 market correction, a spot longer-term technical traders could be targeting around 5,638, which is only 3.3% away. Furthermore, we've been highlighting that the lesser-followed 30-day moving average is still intact, and the trend is acting similarly to the bull rally before the April pullback, where dips to the commonly followed 20-day moving average are being bought up.
Moreover, we are heading into one of the best months of the year for equities. I probably sound like a broken record because I pop in to give you the data annually around this time of year. But here we go; over the past 20 years, July has now taken over as the best month of the year for equities, being positive 75% of the time by a mean average of +2.29%. Since 1950, it's averaged a +0.89% return and has been positive 63.5% of the time. The caveat is during election years, it only averaged +0.27% of the time and was positive 55% since 1950. That's not so good. However, as I've pointed out in the past, most of these losses occur in the back half of the month, post-options expiration.
One underbelly highlight from the last seven trading sessions I've witnessed is the rotation into other sectors. Since the market holiday for Juneteenth, semiconductors and other artificial intelligence (AI)-themed companies have primarily been trading sideways or pulling back. This year, the major indices have been driven by AI-themed stories. At the same time, most of the broader market has struggled to participate in a meaningful way, as evidenced by the equal weight indices for the S&P 500 (RSP -- 164.28) and Nasdaq (QE – 88.74) being positive by 4.07% and 6.22% YTD respectively.
But over these last seven trading sessions, we've seen software and banks come back alive on top of extensive breakouts from Alphabet's (GOOGL -- 182.15) and Amazon.com (AMZN -- 193.25). Additionally, the Russell 2000 (RUT -- 2,047.69) finished positive on Friday and for the week. So the question will be, can July provide the spark needed to get other stocks going and break out of the range they've been stuck in?
The second half of May weakness may in part be explained by the shorts, who got aggressive as the SPX made new highs during this same time period. Per the chart below, short interest increased by nearly 4% from mid-May into the end of May.
There is a chance that many of these shorts are already underwater, though this is not a guarantee. Since the SPX’s recent low, its advance/decline line has been retreating, suggesting fewer stocks participating in the rally that has been led by large-cap technology.
- Monday Morning Outlook, June 17, 2024
The bear arguments are that the market is overbought, isn't supported by broad breadth expansion, and that the Fed is behind the curve. While these may be true in some sense, one factor that could lead to stocks' continued advance in the near term is cumulative short interest (SI), which has been ramping higher according to our data. When we look at short-interest data in the components of the S&P 500, we see that it increased +14.63% this year and, since the last report, by 3.53%.
This puts it in the 100th percentile over the past year and the 96th percentile over the past five years. In addition, the Nasdaq component short-interest is also in the 100th percentile in the past year and the 95th percentile in the past five years, with a change in SI by 7.66% since the last report. This tells us hedge funds have dug in on their short positioning, further illustrated by the Hedge Fund Exposure index at all-time lows.
Per the Goldman Sachs Hedge Fund Crowding Index, hedge funds are the most crowded in positioning since the index's 2016 and 2020 all-time highs. According to Goldman's hedge fund tracking data, long exposure to semiconductors is at a record high of 6.5%. This will eventually spill over as they reduce net exposure to these longs, but do hedge funds get more short at these levels? Or does this money rotate into other sectors that haven't benefited as much from the bull rally?
In other words, July could get interesting. The majority of market participants expect it to be good as history suggests, and as long as the S&P 500 continues to hold the 20-day moving average, it's still firmly in a near-term bullish cycle. But, I also see other possibilities. One that is interesting is a rotation trade where we see the average stocks rise while the market leaders cool and pull back as we finally get the rotation this bull market needs. It's just one theory and not one that has worked out all year, but if it happens, July might be that month. Until next time, stay with the trend and trade them well.
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CoT: Peek Into Future Through Futures, How Hedge Funds Are Positioned
By: Hedgopia | June 29, 2024
• Following futures positions of non-commercials are as of June 25, 2024.
E-mini S&P 500: Currently net short 65.2k, down 48.9k.
In the first four sessions, there were bids waiting at the 10-day moving average, although Monday’s session ended in a shooting star. Come Friday, within the first hour, a new all-time high of 5524 was hit, but it was all downhill from that point, with the session ending at 5460, down 0.1 percent for the week.
This has the potential to be an important reversal. A gravestone doji showed up on the weekly, having formed after eight out of nine weeks of uptrend post-April low. Even last week’s candle left behind a long upper shadow.
This is an opening for the bears. Through Friday’s high, the S&P 500 is already up 15.8 percent for the year. It is time to digest these gains.
Immediately ahead, the June 12th gap-up gets filled at 5370s.
Nasdaq (mini): Currently net long 7.4k, up 11.2k.
Last week, after rallying in seven out of the eight weeks post-April bottom, a gravestone doji showed up on the weekly (more on this here). The potentially bearish candle appeared right after a bullish marubozu weekly candle and needed confirmation.
The gravestone doji showed up in a week in which a new high was reached. This week, a newer high was hit on Friday when 20018 was tagged intraday, but tech bulls were unable to hang on to the gains, ending the session at 19683, down 0.1 percent for the week, forming a weekly spinning top. Timing and duration notwithstanding, the odds now favor the bears.
Russell 2000 mini-index: Currently net short 50k, down 7.8k.
The Russell 2000 rallied 1.3 percent this week to 2048 – smack in the middle of 2000 and 2100.
The index has traded above 2000 since early May but has failed to reclaim 2100 since early March; 2100 is a significant level.
The small cap index peaked in November 2021 at 2459, subsequently bottoming at 1641 in June 2022, which was successfully tested in October of both 2022 and 2023. A 61.8-percent Fibonacci retracement of that drop amounts to 2144. The index lost 2100 in January 2022 and has since struggled at that level; 2100 also represents a measured-move price target post-breakout at 1900 last December. Before that, the index went back and forth between 1700 and 1900 going back to January 2022.
Odds favor 2100 continues to act as a ceiling.
US Dollar Index: Currently net long 17.5k, down 73.
The US dollar index remains bound by two important lines. This week, it inched up 0.1 percent to 105.54, with a high of 105.80 and a low of 105.01; the high just about tested trendline resistance from last October when the index peaked at 107.05, while the low found support at a rising trendline from last December when the index bottomed at 100.32.
It is a wait-and-watch for now. Once the index breaks – either up or down – that probably will decide which way the momentum persists.
VIX: Currently net short 61k, up 11.6k.
VIX dropped as low as 11.87 intraday Friday but ended the session at 12.44; the session low also kissed the daily lower Bollinger band and found support. The Bollinger bands are also tightening. Historically, this precedes a sharp move – either up or down.
Going back six years, volatility bulls have repeatedly defended 12, and this seems to be happening again. Friday’s session low also did not undercut the May 23rd low of 11.52. Odds favor volatility bulls at this juncture.
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S&P 500 Index (SPX) »» Weekly Summary Analysis
By: Marty Armstrong | June 29, 2024
This market made a new high today after the past 3 trading days. The market opened higher and closed lower making it an outside reversal to the downside warning that a further decline is possible. Our projected support for tomorrow's closing lies at 544387. Therefore, the closing below the previous low creates an outside reversal to the downside which was a very sharp swing of 1.31%. Volatility notwithstanding, the market finished on the weak side. This market is trading still positive toward the upper band of the monthly trading range and it is currently trading below last month's high warning we could have a temporary high on a monthly basis. Up to this moment in time, the market remains neutral on the momentum indicator yet bearish on the short-term trend indicator while the long-term trend and cyclical strength are bullish. This market is also trading above the bank of eight moving average indicators also suggesting it is still above underlying support at this moment.
During the last session, we did close above the previous session's Intraday Crash Mode support indicator which was 543846 settling at 548287. The current Crash Mode support for this session was 545995 which we penetrated intraday but we closed back above that level finishing at 546048 implying the market is still basing sustaining above the last low for now. The Intraday Crash indicator for the next session will be 544206. Remember, opening below this number in the next session will warn that the market may enter an abrupt panic sell-off to the downside. Now we have been holding above this indicator in the current trading session, and it resides lower for the next session. If the market opens above this number and holds above it intraday, then we are consolidating. Prevailing above this session's low will be important to indicate the market is in fact holding. However, a break of this session's low of 545112 and a closing below that will warn of a continued decline remains possible.
Intraday Projected Crash Mode Points
Today...... 545995
Previous... 543846
Tomorrow... 544206
This market has not closed above the previous cyclical high of 550553 while it has exceeded that level intraday. Obviously, it is pushing against this resistance level.
ECONOMIC CONFIDENCE MODEL CORRELATION
Here in S&P 500 Cash Index, we do find that this particular market has correlated with our Economic Confidence Model in the past. The Last turning point on the ECM cycle low to line up with this market was 2009 and 2002. The Last turning point on the ECM cycle high to line up with this market was 2022 and 2007 and 2000.
MARKET OVERVIEW
NEAR-TERM OUTLOOK
The S&P 500 Cash Index has continued to make new historical highs over the course of the rally from 1974 moving into 2024. Prominently, we have elected two Bullish Reversals to date.
This market remains in a positive position on the weekly to yearly levels of our indicating models. Pay attention to the Monthly level for any serious change in long-term trend ahead.
The perspective using the indicating ranges on the Daily level in the S&P 500 Cash Index, this market remains moderately bullish currently with underlying support beginning at 544759 and overhead resistance forming above at 547132. The market is trading closer to the resistance level at this time.
On the weekly level, the last important high was established the week of June 24th at 552364, which was up 35 weeks from the low made back during the week of October 23rd. So far, this week is trading within last week's range of 552364 to 544656. Nevertheless, the market is still trading downward more toward support than resistance. A closing beneath last week's low would be a technical signal for a correction to retest support.
When we look deeply into the underlying tone of this immediate market, we see it is currently still in a semi neutral posture despite declining from the previous high at 552364 made 0 week ago. This market has made a new historical high this past week reaching 552364. Here the market is trading weak gravitating more toward support than resistance. We have technical support lying at 551730 which we are currently trading below implying the market is very weak. This infers that this level will now be resistance. Our Major Channel Support lies at 479120 and a break of that level would be a bearish indication for this market.
Right now, the market is above momentum on our weekly models hinting this is still bullish for now as well as trend, long-term trend. Looking at this from a wider perspective, this market has been trading up for the past 4 weeks overall.
INTERMEDIATE-TERM OUTLOOK
YEARLY MOMENTUM MODEL INDICATOR
Our Momentum Models are rising at this time with the previous low made 2022 while the last high formed on 2023. However, this market has rallied in price with the last cyclical high formed on 2022 warning that this market remains strong at this time on a correlation perspective as it has moved higher with the Momentum Model.
Interestingly, the S&P 500 Cash Index has been in a bullish phase for the past 8 months since the low established back in October 2023.
Critical support still underlies this market at 485340 and a break of that level on a monthly closing basis would warn that a sustainable decline ahead becomes possible. Immediately, the market is trading within last month's trading range in a neutral position.
Nasdaq Composite Index (COMP) »» Weekly Summary Analysis
By: Marty Armstrong | June 29, 2024
NASDAQ Composite Index Cash closed today at 1773260 and is trading up about 18% for the year from last year's settlement of 1501135. Caution is required for this market is starting to suggest it may now decline on the MONTHLY level. As of now, this market has been rising for 2 months going into July reflecting that this has been only still, a bullish reactionary trend.
ECONOMIC CONFIDENCE MODEL CORRELATION
Here in NASDAQ Composite Index Cash, we do find that this particular market has correlated with our Economic Confidence Model in the past. The Last turning point on the ECM cycle low to line up with this market was 2022 and 2009 and 2002. The Last turning point on the ECM cycle high to line up with this market was 2007 and 2000.
MARKET OVERVIEW
NEAR-TERM OUTLOOK
The NASDAQ Composite Index Cash has continued to make new historical highs over the course of the rally from 2009 moving into 2024. Noticeably, we have elected four Bullish Reversals to date.
This market remains in a positive position on the weekly to yearly levels of our indicating models. Pay attention to the Monthly level for any serious change in long-term trend ahead.
From a perspective using the indicating ranges on the Daily level in the NASDAQ Composite Index Cash, this market remains moderately bullish currently with underlying support beginning at 1773012 and overhead resistance forming above at 1779688. The market is trading closer to the support level at this time. An opening below this level in the next session will imply a decline is unfolding.
On the weekly level, the last important high was established the week of June 24th at 1803500, which was up 35 weeks from the low made back during the week of October 23rd. So far, this week is trading within last week's range of 1803500 to 1749402. Nevertheless, the market is still trading downward more toward support than resistance. A closing beneath last week's low would be a technical signal for a correction to retest support.
When we look deeply into the underlying tone of this immediate market, we see it is currently still in a semi neutral posture despite declining from the previous high at 1803500 made 0 week ago. Still, this market is within our trading envelope which spans between 1522926 and 1811174. This market has made a new historical high this past week reaching 1803500. Here the market is trading weak gravitating more toward support than resistance. We have technical support lying at 1777655 which we are currently trading below implying the market is very weak. This infers that this level will now be resistance. Our Major Channel Support lies at 1518027 and a break of that level would be a bearish indication for this market.
Right now, the market is above momentum on our weekly models hinting this is still bullish for now as well as trend, long-term trend. Looking at this from a wider perspective, this market has been trading up for the past 10 weeks overall.
INTERMEDIATE-TERM OUTLOOK
YEARLY MOMENTUM MODEL INDICATOR
Our Momentum Models are rising at this time with the previous low made 2022 while the last high formed on 2023. However, this market has rallied in price with the last cyclical high formed on 2021 warning that this market remains strong at this time on a correlation perspective as it has moved higher with the Momentum Model.
Interestingly, the NASDAQ Composite Index Cash has been in a bullish phase for the past 8 months since the low established back in October 2023.
Critical support still underlies this market at 1586250 and a break of that level on a monthly closing basis would warn that a sustainable decline ahead becomes possible. Immediately, the market is trading within last month's trading range in a neutral position.
July 4th Bullish Pre-Holiday Trade, Bearish After
By: Almanac Trader | June 29, 2024
Trading the three days ahead of the July 4th Independence Day holiday has historically been stronger than the days after the holiday. Trading on the day before and after the holiday is often lackluster. Volume tends to decline on either side of the holiday as vacations begin early and/or finish late. Since 1980, DJIA, S&P 500, NASDAQ and Russell 2000 have recorded net losses on the day after.
This has become more pronounced in recent years and was the case again last year. However, over the past thirteen years since 2011, trading after Independence Day has softened notably. DJIA has declined ten times in 13 years on the day after. S&P 500 has slipped eight times. Average performance remains fractionally positive. NASDAQ and Russell 2000 have more up days after the 4th but R2K averages losses the two days after the 4th.
Read Full Story »»»
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July First Day Most Bullish Day of Year
By: Almanac Trader | June 27, 2024
July’s first trading day is the third best performing first trading day of all twelve months with DJIA gaining a cumulative 1679.02 points since 1998. Over the past 21 years, DJIA’s first trading day of July has produced gains 81.0% of the time with an average advance of 0.38%.
S&P 500 has advanced 90.5% of the time (average gain 0.46%) since 2003 but has been up 13 straight years in a row on the first trading day of July. NASDAQ has been similarly bullish advancing 85.7% of the time (0.51% average gain).
No other day of the year exhibits this amount of across-the-board strength, which supports the case for declaring the first trading day of July the most consistently bullish day of the year over the past 21 years. Although, the third from last day of August is rising to challenge for this title.
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Money managers Remain Bullish with their exposure to the US Equity markets since last week...
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NAAIM Exposure Index
June 27, 2024
The NAAIM Number
85.44
Last Quarter Average
84.57
»»» Read More…
$SPY Large $2.6 Million OTM Put
By: Cheddar Flow | June 27, 2024
• $SPY Large $2.6M OTM Put
This has the September expiration and was executed above the ask.
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The 10 Top/Bottom NASDAQ 100 Index percent net change performers
By: Thom Hartle | June 27, 2024
• Today (8:34 CST), the 10 top/bottom percent net change performers in the NASDAQ 100 Index.
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Dumb Money Confidence has become less enthusiastic
By: SentimenTrader | June 27, 2024
• Bull markets can continue as long as investors remain bullish. At some point, that optimism climaxes, but up until then, rising optimism is a feature of sustained bull markets.
That's why it's a bit disturbing that as the major indexes have climbed, Dumb Money Confidence has become less enthusiastic. That's what we saw preceding the peak in 2021, though that divergence went on for many more months before it mattered.
The divergence is even more stark in the Fear & Greed model.
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The percentage of stocks in the S&P 500 holding above their 200-day averages has consistently held above 70%. For stocks in the Nasdaq Composite, that figure is closer to 40%
By: SentimenTrader | June 26, 2024
• The percentage of stocks in the S&P 500 holding above their 200-day averages has consistently held above 70%. For stocks in the Nasdaq Composite, that figure is closer to 40%.
A spread of 30% has been rare over the past decade and generally coincided with markets in broad topping formations.
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The falling short interest in the Nasdaq 100 is seen as a potential bearish signal, as it reduces a source of support for the market and makes stocks more vulnerable to negative news and price declines
By: Isabelnet | June 27, 2024
• The falling short interest in the Nasdaq 100 is seen as a potential bearish signal, as it reduces a source of support for the market and makes stocks more vulnerable to negative news and price declines.
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Markets Monthly Pattern »» Watchlist - Top 10
By: Marty Armstrong | June 27, 2024
• Dow Jones Industrials Index »» Still Bearish
• NASDAQ Composite Index »» Pressing Higher
• NASDAQ 100 Index »» Breakout
• S&P 500 Index »» Pressing Higher
• Russell 2000 Index »» Preparing to Rally
• US Dollar Index »» New Pattern Forming
• CBOE VIX Index »» Still Bearish
• NY Gold Futures »» Turning BACK DOWN
• NY Silver COMEX Futures »» Turning BACK DOWN
• NY Crude Oil Futures »» Forming High
The AAII Investor Sentiment
By: AAII | June 27, 2024
Bullish 44.5%
Neutral 27.2%
Bearish 28.3%
• Historical 1-Year High
Bullish: 52.9%
Neutral: 36.4%
Bearish: 50.3%
Read Full Story »»»
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The net long position held by institutional asset managers on E-mini S&P 500 futures has been rising, with the potential to reach the peak positioning level observed in early 2020
By: Isabelnet | June 26, 2024
• S&P 500
The net long position held by institutional asset managers on E-mini S&P 500 futures has been rising, with the potential to reach the peak positioning level observed in early 2020.
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Current levels of the Sentiment/VIX Composite Index are more indicative of near-term market peaks than the beginning of a bullish trend
By: Isabelnet | June 26, 2024
• S&P 500
Current levels of the Sentiment/VIX Composite Index are more indicative of near-term market peaks than the beginning of a bullish trend.
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Are We Due For A Little Mean Reversion?
By: Almanac Trader | June 26, 2024
I remain bullish on 2024. My 2024 Annual Forecast released on December 21, 2023 is on track, yet the market has already achieved (and slightly surpassed) my Base Case Scenario of average election year gains of 8-15%. While my Best Case Scenario of 15-25% is likely now in play with the market running well above any of the historical seasonal patterns I can concoct, the market may be due for a little reversion to the mean.
The charts here illustrate the three most relevant seasonal patterns: All Election Years, election years with a Sitting President Running for reelection and my STA Aggregate Cycle, which is a combo of all years, election years and the 4th year of the decade (years ending in 4). The Midyear Rally I discussed early this week is still in play. But after that around mid-July, I would not be surprised if the market were to pull back toward the mean a bit, maybe 5-8%.
There’s plenty on the near-term horizon to spook traders from election campaign and political missteps, to Fedspeak, economic data disappointments and just plain old Summer Doldrums (2024 STA page 50). After going long last October, we have been advising newsletter subscribers over the past few months to take some profits, tighten up stops, generate some cash and hold some short-term bonds paying 5%+ while we wait for the fatter pitch.
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$SQQQ $1.7 Million Puts. This is the 3x Inverse Nasdaq ETF and the orders were bought to open (Vol>OI)
By: Cheddar Flow | June 26, 2024
• $SQQQ $1.7M Puts
This is the 3x Inverse Nasdaq ETF and the orders were bought to open (Vol>OI)
We have seen this type of format as a tech hedging strategy before
Read Full Story »»»
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The 10 Top/Bottom S&P 500 Index percent net change performers
By: Thom Hartle | June 26, 2024
• Today (8:38 CST), the 10 top/bottom percent net change performers in the S&P 500 Index.
Read Full Story »»»
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$SPX $SPY - Mrkt Hrs chart prior to open...
By: Sahara | June 26, 2024
• $SPX $SPY - Mrkt Hrs chart prior to open...
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$SPX This may not be what the Bears want to hear...
By: Intelligent Investing | June 25, 2024
• $SPX
This may not be what the Bears want to hear.
- Although price is always the final arbiter, some market breadth gauges are getting oversold.
- Meanwhile, (election year only) seasonality shows an important low could be due soon.
Read Full Story »»»
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$SPY $1.6 Million ITM Put
By: Cheddar Flow | June 25, 2024
• $SPY $1.6M ITM Put
There were a couple million of these December 550p's yesterday too
*Above the Ask*
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The Nasdaq may potentially reach 18,700 and 22,400, given the possibility of a catch-up trade within a secular bull market presidential cycle
By: Isabelnet | June 25, 2024
• The Nasdaq may potentially reach 18,700 and 22,400, given the possibility of a catch-up trade within a secular bull market presidential cycle.
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S&P 500: The current reading of 87.42 indicates that the US stock market is overbought, reflecting a notable level of investor optimism and suggesting the potential for a market correction in the near future
By: Isabelnet | June 25, 2024
• S&P 500
The current reading of 87.42 indicates that the US stock market is overbought, reflecting a notable level of investor optimism and suggesting the potential for a market correction in the near future
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A lot of bullish tech flow is hitting the tape right now
By: Cheddar Flow | June 25, 2024
• A lot of bullish tech flow is hitting the tape right now
Read Full Story »»»
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$QQQ ~$1 Million Highly Unusual Weekly Call
By: Cheddar Flow | June 25, 2024
• $QQQ ~$1M Highly Unusual Weekly Call
This was executed above the ask for the Friday expiration
The whale expects a quick upside move
Read Full Story »»»
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Markets Monthly Pattern »» Watchlist - Top 10
By: Marty Armstrong | June 25, 2024
• Dow Jones Industrials Index »» New Pattern Forming
• NASDAQ Composite Index »» Possible MAJOR HIGH
• NASDAQ 100 Index »» Breakout
• S&P 500 Index »» Possible MAJOR HIGH
• Russell 2000 Index »» Preparing to Rally
• US Dollar Index »» New Pattern Forming
• CBOE VIX Index »» Turning Back UP
• NY Gold Futures »» Turning BACK DOWN
• NY Silver COMEX Futures »» Turning BACK DOWN
• NY Crude Oil Futures »» Temp Low
Christmas In July: Tech Weakness Setting Up NASDAQ’s Midyear Rally
By: Almanac Trader | June 24, 2024
In the mid-1980s tech’s influence in the market began to grow and the market’s focus in early summer shifted to the outlook for second quarter earnings of technology companies. In anticipation of positive results, over the last three trading days of June and the first nine trading days in July, NASDAQ typically enjoys a rally. This 12-day run has been up 30 of the past 39 years with an average historical gain of 2.5%. Look for this rally to begin around June 26 and run until about July 12.
After the bursting of the tech bubble in 2000, NASDAQ’s mid-year rally had a spotty track record from 2002 until 2009 with three appearances and five no-shows in those years. However, it has been quite solid over the last fourteen years, up twelve times with two losses. After struggling in the bear market of 2022, NASDAQ resoundingly rebounded last year to gain 4.1% compared to a total July gain of 4.0%.
Read Full Story »»»
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$SPY $3+ Million ITM December Puts *Above the Ask*
By: Cheddar Flow | June 24, 2024
• $SPY $3M+ ITM December Puts
*Above the Ask*
Read Full Story »»»
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$SPX Some Heavy Premium Coming in
By: Cheddar Flow | June 24, 2024
• $SPX Some Heavy Premium Coming in
Read Full Story »»»
DiscoverGold
S&P 500 - The Zweig Breadth Thrust, a rare occurrence, has historically indicated strong S&P 500 performance over the next 6 and 12 months, with a median increase in value of 24.8% one year later since 1945
By: Isabelnet | June 24, 2024
• S&P 500
The Zweig Breadth Thrust, a rare occurrence, has historically indicated strong S&P 500 performance over the next 6 and 12 months, with a median increase in value of 24.8% one year later since 1945.
Read Full Story »»»
DiscoverGold
Sentiment: The Market Greed/Fear Index, currently at 78.73, indicates optimistic investor sentiment in the US stock market, signaling a greedy market
By: Isabelnet | June 24, 2024
• Sentiment
The Market Greed/Fear Index, currently at 78.73, indicates optimistic investor sentiment in the US stock market, signaling a greedy market.
Read Full Story »»»
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The 10 Top/Bottom S&P 500 Index percent net change performers
By: Thom Hartle | June 24, 2024
• Today (8:34 CST), the 10 top/bottom percent net change performers in the S&P 500 Index.
Read Full Story »»»
DiscoverGold
The 10 Top/Bottom NASDAQ 100 Index percent net change performers
By: Thom Hartle | June 24, 2024
• Today (8:34 CST), the 10 top/bottom percent net change performers in the NASDAQ 100 Index.
Read Full Story »»»
DiscoverGold
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:::::::::::: Welcome to S&P 500 & Nasdaq Analysis and Trends :::::::::::::
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