Stock Market Outlook entering the Week of July 23rd = Uptrend
- ADX Directional Indicators: Uptrend
- Price & Volume Signals: Uptrend
- Elliott Wave Analysis: Mixed
ANALYSIS
The stock market outlook maintains an uptrend for the S&P500.
The S&P500 ($SPX) rose 0.7% last week. No change versus key support levels; the index still sits ~5% and ~12% above the 50 and 200-day moving averages, respectively.
SPX Price & Volume Chart for the Week of July 23 2023
No change in signal for the ADX; a strong uptrend continues to unfold. Price/volume also remains in an uptrend, with almost no distribution taking place over the past 5 weeks.
SPX Elliott Wave Analysis for the Week of July 23 2023 – Bullish
Elliott Wave counts received a small update to the Minute wave structure, but stays mixed while we wait for the next pullback. Key support and resistance levels are 4169 and 4632. Short-term view remains bullish based on wave structure (3 of 5), while the negative divergence in the MACD histogram is bearish longer-term.
SPX Elliott Wave Analysis for the Week of July 23 2023 – Bearish
COMMENTARY
Quite a bit of option-related trading last week; largest July expiration on record. We seem to be getting a lot of those (op-ex records) over the past year.
On the economic front, housing starts and permits for June were down slightly M/M, which isn’t surprising given May’s outperformance. U.S. Retail Sales June were also lower than expected, coming in at +0.2% M/M; not the best signal for upcoming earnings from retail names.
Big week of earnings coming up:
In addition to earnings, there’s a lot of economic data set for release this week. Manufacturing and Services PMI from S&P Global kick things off on Monday, while Tuesday brings more housing data to the table. The FOMC releases another interest rate decision on Wednesday, followed by the “Advanced” Q2 GDP estimate on Thursday and June PCE on Friday.
First things first: before trading begins on Monday, Nasdaq Inc. will before a “Special Rebalance” Nasdaq 100 index to address the benchmark’s “overconcentration” in the largest companies by market capitalization.
Best to Your Week!
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