When the S&P hit a low of 3636 on June 17 (what I check with because the “Bowley Backside”), it had fallen virtually 25% from its January 4 excessive of 4818. Since that June 17 low, the S&P rose 7.7%, touching 3918 on Friday. And despite the fact that the market initially offered off sharply on Friday’s employment numbers, that did not final lengthy, as we noticed shopping for curiosity on the pullback with increased lows all through the week.
When you have a look at the chart above, at this level, the primary key stage of technical help is the 20-day transferring common, at the moment at 3869. Then, there needs to be robust worth help within the 3740 stage, which, I feel, will maintain on any near-term pullbacks, with that 3636 stage being the ultimate vital stage of help, To the upside, the primary key stage of technical resistance is 3972, the 50-day transferring common, with key worth resistance close to the 4175 stage. So, based mostly on my evaluation, if the S&P holds 3740, that will symbolize a transfer decrease from right here of roughly 4%. Nonetheless, if the S&P challenges that 4175 stage, that will symbolize a transfer increased of seven%, so larger upside to draw back threat.
After all, an terrible lot of worth motion might be decided over the subsequent few weeks when earnings begin popping out in droves. And all you hear nowadays is that the market hasn’t factored in a recession, which can or might not be true. Nonetheless, it is onerous to purchase the argument many analysts are making, that we’re already in a recession, once you have a look at Friday’s employment report displaying such a powerful jobs image.
The underside line is that it appears like we have seen a near-term backside, as identified by our Chief Market Strategist Tom Bowley when the S&P hit that 3636 low. After all, we might see renewed promoting, particularly if earnings do certainly come up brief. Nonetheless, I nonetheless just like the reward-to-risk, which, I imagine, is at the moment to the upside. Within the meantime, mark your calendar for Monday, July 18, when Tom will conduct a FREE webinar, our “Q2 Earnings: Sneak Preview” the place he might be offering in-depth evaluation of upcoming earnings — potential beats and misses — invaluable, well timed info. And if you wish to be stored updated on key market and earnings info, simply click on right here to get Tom’s EarningsBeats Digest that comes out each M, W and F.
At your service,
John Hopkins
EarningsBeats.com
