I hope everyone has enjoyed the Fourth of July holiday and had some time for R&R with friends and family. If you are a subscriber, the monthly update went out right on time following the close of the month.
Looking at a daily chart of the S&P500/SPY, price hasn’t dropped below the lower channel line that started in the spring of 2017 and price bounced off the 50-day moving average on Friday and today. However…short term, price has formed lower highs and lower lows using the 2400 level as a base from late May and now June and July. Round numbers tend to act that way (creating support or resistance). Until 2400 is definitively broken through and closes on a daily basis, there really isn’t anything too alarming on the S&P500/SPY at this time.
The NASDAQ/QQQ is slightly different in that the price peaked June 9th, we had a pretty decent “mini-crash” when all the megacap (think FAAMG stocks) tech stocks got sold off, a bounce, and then a lower low last week. That meets the definition of a lower high and a lower low creating the start of a downtrend. Price needs to rally back at least above the late June QQQ peak to bring any doubt to this new trend. Price is hovering just above and below the 50-day moving average as well. Keep an eye on the NASDAQ/QQQ (and FAAMG stocks) for an idea of what will happen to the broader market of the DOW and S&P500. The larger market has been heavily propped up by the FAAMG stocks, and if they start to falter, the entire market is likely to have issues.