Stock Market Outlook entering the Week of June 25th = Uptrend
- ADX Directional Indicators: Uptrend
- Price & Volume Signals: Uptrend
- Elliott Wave Analysis: Downtrend
ANALYSIS
The stock market outlook maintains an uptrend to start the final trading week of June.
The S&P500 ($SPX) fell 1.4% last week, but remains elevated from the 50 and 200 day moving averages (~3.5% and ~8%, respectively).
SPX Price & Volume Chart for the Week of June 25 2023
No change in signal for the ADX or price/volume. Rebalancing of the Russell 2000 skewed trading volumes to the upside on Friday, although price was almost unchanged.
Elliott Wave moves from mixed to downtrend. The MACD cross-over marks the end of the current wave structure for both bullish and bearish counts.
SPX Elliott Wave Analysis for the Week of June 25 2023 – Bearish Count
This signal does NOT mean the market won’t rally from here. It’s entirely possible the SPX bounces back towards the June 16 high this week, much like the late November 2022 and mid-February 2023 rallies after the MACD began a bearish cross-over.
SPX Elliott Wave Analysis for the Week of June 25 2023 – Bullish Count
COMMENTARY
A rate hike from the UK central bank surprised most market participants, during an otherwise light week of economic data releases.
The S&P500 completed earnings season: Revenue grew 4.2%, profits fell 3.6%. Those figures don’t sound too bad, until you look at the sector break-down and see the relatively large range of performance.
Source: Hedgeye Risk Management via Bloomberg
Regardless of how many times company executives mention “AI” and/or artificial intelligence, underlying economic data doesn’t support a widespread earnings turnaround next quarter; reporting begins in 3 weeks.
Monday’s opening price action will be influenced by Russia’s internal conflict, which took center-stage during the weekend. We get durable goods/orders, consumer confidence, and home sales on Tuesday morning.
Source: TD Ameritrade via Briefing.com
The Fed’s preferred inflation gauge, Core Personal Consumption Expenditure (PCE), drops on Friday. The data probably shows inflation remaining high, but not as high as last month or last year, which still supports the U.S. Fed’s “higher for longer” stance on interest rates.
The coming week not only marks the end of June, but also the end of the second quarter. Will equities get a month-end mark up as investors fear missing out on the June rally? Or will market participants unload their winners ahead of the summer trading lull? Maybe a bit of both…why don’t consider the same for yourself?
Best to Your Week!
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