July 16, 2024 (Investorideas.com Newswire) Monday’s buying and selling session wasn’t a game-changer, with the S&P 500 index gaining 0.28% after reaching a brand new report excessive of 5,666.94. The market basically stored extending its short-term consolidation following final Wednesday’s rally, Thursday’s CPI launch, and Friday’s PPI launch. This morning, the S&P 500 index is more likely to open 0.1% larger, as indicated by futures contracts. The sentiment remained barely constructive after the earnings releases from BAC, MS, and UNH.
On Friday, I wrote “Thursday’s buying and selling session introduced declines for the inventory market (…) It was a typical sell-the-news value motion following lower-than-expected client inflation information. However was {that a} change of pattern or only a fast downward correction? For now, it appears like a correction, however it appears that evidently bulls will likely be in a defensive stance for some time.”
Final Tuesday I made a decision to open a speculative quick place.
Investor sentiment has elevated considerably final, as indicated by the AAII Investor Sentiment Survey on Wednesday, which confirmed that 49.2% of particular person traders are bullish, whereas solely 21.7% of them are bearish.
As I discussed in my inventory value forecast for July, “Whereas extra advances stay doubtless, the chance of a deeper downward correction additionally rises. Total, there have been no confirmed detrimental indicators thus far, however the Might acquire of 4.8% and June acquire of three.5% counsel a extra cautionary method for July (…) The market will likely be ready for the quarterly earnings season within the second half of the month. Plus, there will likely be a sequence of financial information, together with the CPI launch on July 11, the Advance GDP quantity on July 25, and the FOMC Price Resolution on July 31.”
The S&P 500 index continues buying and selling close to its report excessive, as we are able to see on the day by day chart.
Nasdaq 100 Stays Comparatively Weaker
The technology-focused Nasdaq 100 index closed 0.27% larger yesterday, remaining properly under its report excessive of 20,690.97 that was reached on Wednesday.
Final Thursday, I concluded that “There are short-term overbought situations, and the market is more likely to high sooner or later.” This proved correct with the Nasdaq 100 reversing sharply from its new report excessive. This morning, the Nasdaq 100 is more likely to open 0.2% larger, extending a consolidation forward of the vital massive tech earnings releases subsequent week.
VIX: Barely Increased, Closing Above 13
The VIX index, also called the concern gauge, is derived from choice costs. Just lately, it has been hovering across the 12 stage, which traditionally is comparatively low, indicating low concern available in the market. Yesterday, it closed barely above the 13 stage, indicating somewhat extra concern available in the market.
Traditionally, a dropping VIX signifies much less concern available in the market, and rising VIX accompanies inventory market downturns. Nevertheless, the decrease the VIX, the upper the likelihood of the market’s downward reversal.
Futures Contract Is Nonetheless Shut to five,700
Let’s check out the hourly chart of the S&P 500 futures contract. Wednesday’s CPI launch led to a pullback from a brand new report excessive above the 5,700 stage, and on Friday, it traded as little as 5,621. Yesterday although, the market reached a brand new report of round 5,719, earlier than pulling again and shutting under 5,700. It nonetheless appears like a short-term consolidation, and presumably, a topping sample.
Conclusion
This morning, the S&P 500 is more likely to open barely larger following yesterday’s intraday pullback from a brand new report excessive. Will the uptrend proceed? Earnings releases are usually higher than anticipated, nonetheless, they’re additionally met with ‘sell-the-news’ value motion. The index stays very near new information, however the danger of a extra pronounced downward correction is growing.
I opened a speculative quick place within the S&P 500 futures contract final Tuesday.
Quoting my inventory value forecast for July, “Buyers proceed pricing within the Fed’s financial coverage easing that’s purported to occur this yr. Therefore, a medium-term downward reversal nonetheless appears a much less doubtless state of affairs. Nevertheless, the latest record-breaking rally could also be a trigger for some short-term concern as a downward correction could also be coming.”
For now, my short-term outlook stays bearish.
This is the breakdown:
- The S&P 500 index could also be marking a topping sample earlier than some downward correction.
- Buyers are ready for the approaching quarterly earnings season.
- In my view, the short-term outlook is bearish.
The total model of at the moment’s evaluation – at the moment’s Inventory Buying and selling Alert – is greater than what you learn above, and it consists of the extra evaluation of the Apple (AAPL) inventory and the present S&P 500 futures contract place. I encourage you to subscribe and skim the small print at the moment. Shares Buying and selling Alerts are additionally part of our Diamond Package deal that features Gold Buying and selling Alerts and Oil Buying and selling Alerts.
And should you’re not but on our free mailing record, I strongly encourage you to hitch it – you may keep up-to-date with our free analyses that can nonetheless put you forward of 99% of traders that do not have entry to this info. Be part of our free inventory e-newsletter at the moment.
Extra Data:
Disclaimer/Disclosure: Investorideas.com is a digital writer of third social gathering sourced information, articles and fairness analysis in addition to creates unique content material, together with video, interviews and articles. Authentic content material created by investorideas is protected by copyright legal guidelines aside from syndication rights. Our website doesn’t make suggestions for purchases or sale of shares, companies or merchandise. Nothing on our websites needs to be construed as a proposal or solicitation to purchase or promote merchandise or securities. All investing entails danger and doable losses. This website is at present compensated for information publication and distribution, social media and advertising, content material creation and extra. Disclosure is posted for every compensated information launch, content material printed /created if required however in any other case the information was not compensated for and was printed for the only curiosity of our readers and followers. Contact administration and IR of every firm immediately concerning particular questions.
Extra disclaimer information: https://www.investorideas.com/About/Disclaimer.asp Be taught extra about publishing your information launch and our different information companies on the Investorideas.com newswire https://www.investorideas.com/Information-Add/
World traders should adhere to laws of every nation. Please learn Investorideas.com privateness coverage: https://www.investorideas.com/About/Private_Policy.asp
