Stock Market Outlook
For The Week Of July 2nd = Uptrend

ADX Directional Indicators: Uptrend
Price & Volume Action: Uptrend
Elliott Wave Analysis: Downtrend

The S&P500 ($SPX) rose 2.3% last week; rallying into month and quarter end.  The index currently sits 5% and 10% above the 50 and 200-day moving averages, respectively.

2023-07-02-SPX Trendline Analysis - Daily

No change in signal for the ADX or price/volume.  Market leadership, as represented in the IBD Top 50 Innovators ETF ($FFTY), showed signs of accumulation last week.

2023-07-02- SPX Elliott Wave Analysis - Daily - Primary Y (Bearish)

Elliott Wave remains in a downtrend, even with last week's rally.  Last weekend's signal shift appears to be early at first glance, but the bounce wasn't a surprise considering the prior rallies in late November 2022 and mid-February 2023, which also occurred after a MACD crossover.  That said, further upside would be surprising based on the wave counts and likely shifts the signal.

2023-07-02- SPX Elliott Wave Analysis - Daily - Primary 1 (Bullish)

COMMENTARY

Last weekend's Russian drama fizzled out as quickly as it started, with minimal impact on financial markets.  Unfortunately, civil unrest in France this weekend renews the potential for volatility heading into a typically underwhelming week of trading activity.

As for last week's economic data, durable goods orders rose slightly and housing data was mixed.  U.S. consumer confidence was better than expected, hitting the highest headline number since January 2022.

As expected, Personal Consumption Expenditure (PCE) for May showed inflation remaining high, but not as high as last month or last year's reading.  The headline number came in at +3.8% y/y (vs. 3.8% estimate), while Core PCE was +4.6% y/y (vs. estimate of 4.7%).

The answer last week's closing question was A) Month & Quarter end mark-up.  Based on the chart, profits were taken the prior week, with traders content to run things up before heading out of town for the long weekend.

U.S. markets have a shortened trading session on Monday and no trading session Tuesday, in observance of Independence Day on July 4th.

Best to Your Week!

P.S. If you find this research helpful, please tell a friend.
If you don't, tell an enemy.

Sources: Bloomberg, CNBC, Federal Reserve Bank of St. Louis, Hedgeye, U.S. Bureau of Economic Analysis, U.S. Bureau of Labor Statistics

If you're interested in learning more about the relationship between price and volume, or how to find and trade the best stocks for your growth strategy, check out this book on Amazon via the following affiliate link:

How to Make Money in Stocks: A Winning System in Good Times and Bad.

It's one of my favorites.

IMPORTANT DISCLOSURE INFORMATION
This material is for general communication and is provided for informational and/or educational purposes only. None of the content should be viewed as a suggestion that you take or refrain from taking any action nor as a recommendation for any specific investment product, strategy, or other such purpose. Certain information contained herein has been obtained from third-party sources believed to be reliable, but we cannot guarantee its accuracy or completeness.
To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisors of his/her choosing. Invest Safely, LLC is not a law firm, certified public accounting firm, or registered investment advisor and no portion of its content should be construed as legal, accounting, or investment advice.
The material is not to be construed as an offer or a recommendation to buy or sell a security nor is it to be construed as investment advice. Additionally, the material accessible through this website does not constitute a representation that the investments described herein are suitable or appropriate for any person.
Hypothetical Presentations:
Any referenced performance is “as calculated” using the referenced funds and has not been independently verified. This presentation does not discuss, directly or indirectly, the amount of the profits or losses, realized or unrealized, by any reader or contributor, from any specific funds or securities.
The author and/or any reader may have experienced materially different performance based upon various factors during the corresponding time periods. To the extent that any portion of the content reflects hypothetical results that were achieved by means of the retroactive application of a back-tested model, such results have inherent limitations, including:
Model results do not reflect the results of actual trading using assets, but were achieved by means of the retroactive application of the referenced models, certain aspects of which may have been designed with the benefit of hindsight
Back-tested performance may not reflect the impact that any material market or economic factors might have had on the use of a trading model if the model had been used during the period to actually manage assets
Actual investment results during the corresponding time periods may have been materially different from those portrayed in the model
Past performance may not be indicative of future results. Therefore, no one should assume that future performance will be profitable, or equal to any corresponding historical index.
The S&P 500 Composite Total Return Index (the "S&P") is a market capitalization-weighted index of 500 widely held stocks often used as a proxy for the stock market. Standard & Poor's chooses the member companies for the S&P based on market size, liquidity, and industry group representation. Included are the common stocks of industrial, financial, utility, and transportation companies. The S&P is not an index into which an investor can directly invest. The historical S&P performance results (and those of all other indices) are provided exclusively for comparison purposes only, so as to provide general comparative information to assist an individual in determining whether the performance of a specific portfolio or model meets, or continues to meet investment objective(s). The model and indices performance results do not reflect the impact of taxes.

Investing involves risk (even the “safe” kind)! Past performance does not guarantee or indicate future results. Different types of investments involve varying degrees of underlying risk. Therefore, do not assume that future performance of any specific investment or investment strategy be suitable for your portfolio or individual situation, will be profitable, equal any historical performance level(s), or prove successful (including the investments and/or investment strategies describe on this site).

Investing Process Links