Market Overview:
The S&P 500 Cash Index closed at 5567.19 on July 5, 2024. Weekly projected resistance is 5631 (±) with support at 5507 (±). Monthly projected resistance is 5474 (±) with support at 5144 (±). The 2024 yearly projected resistance is 5274 (±) with support at 4289 (±)
Recent Performance:
The S&P 500 gained 106.71 points (2%) in the week ending July 5, 2024. The index hit a low of 5446.53 on Monday and reached a high of 5570.33 on Friday.
Cyclic Analysis:
The 45-day cycle is 23 days along and bullish. The 90-day cycle is 52 days along and neutral. The 180-day and 360-day cycles are bullish. The four-year cycle is bearish into late Summer 2024.
Short-term Outlook:
Strength is expected into mid-July or later, with potential to reach 5650 SPX CASH or higher. A significant peak is anticipated around mid-July, followed by a decline into mid-August. The decline is expected to be countertrend, with a subsequent rally into September.
Medium-term Projections:
After the August correction, higher highs are expected into early-to-mid September. The S&P 500 could potentially reach the 5800-5850 area by mid-September. A larger percentage decline is anticipated from mid-September into late October.
Long-term Outlook:
The 180-day and 360-day cycles suggest an upward trend into late 2024 or early 2025. A new upside target for the 360-day cycle is 5743 – 6064 SPX CASH. A sharp correction of 12-15% is expected in Spring 2025, followed by a potential 30% rally into late 2025 or early 2026.
Presidential Cycle:
The current election-year cycle suggests a peak around early September 2024. A sharp decline is expected into mid-to-late October, followed by a rally into year-end. The next major peak in the presidential cycle is anticipated around late 2025.
Market Breadth:
The NYSE advance/decline line is showing divergence from price, which is a technical negative. The Mid-Term Breadth index is also diverging, supporting the expectation of a decent decline phase.
Market Sentiment:
The market sentiment index remains in a buy signal but is approaching its upper “sell” line. COT data shows hedgers holding a small net short position of 8906 contracts as of the last report.
Technical Signals:
The 50-day moving average is well above the 200-day average, a bullish long-term signal. The 200-day moving average continues to rise, viewed as bullish for the longer term. The SPX needs to remain above 4650 by late October to keep the 200-day average trending higher.
Fundamental Indications:
The yield curve remains inverted, suggesting a potential economic recession in the future. A “de-inversion” of the yield curve would be a strong bearish signal for U.S. stocks. A sharp rally before the start of a recession is typical and currently observed.
Bradley Indicator:
The last major turn was noted for May 27, 2024. The next significant turn is expected in mid-August 2024. A larger turn is anticipated around November 13, 2024, suggesting a potential low point in the market.