It slipped my mind yesterday that the ISM PMI was out. I don’t know what happened?! Maybe it is the summertime blues that got me. The number was better than expected at 51.7 versus estimates for 51.1. I had a chance to dig through the report, and my take was that manufacturing isn’t as bad as some people would want you to believe. The report notes that the June reading coincidence with an annualized real GDP rate of 2.6%. Not so bad. Anyway, I thought it was worth the mention. I guess we may need to keep waiting for that recession. I won’t hold my breath though.

S&P 500 (SPX)

It always gets hard to start predicting the markets move, when you are in record territory and lose those support and resistance levels. At least, for now, we do have a resistance level around 2,980. That is likely where the S&P 500 is heading, eh probably tomorrow.

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A Push To 3,300

Deep down, I feel nervous about this rally. Perhaps because the market has risen only 3% since January 26, 2018. Pretty pathetic. Call it a sideways consolidation if you will.

If the S&P 500 fails to advance meaningfully from its current levels, I think people will start calling this a market top. That will pull in more negative sentiment.

However, we have seen this story before in 2011, 2015, and now. Each period of consolidation was about one and a half years long. The break out in 2011, lead to a 56% rally. Meanwhile, the one in 2016 lead to a near 40%.

Should we see a break out like, in the past, we could rise to roughly 3,300. I had been looking for 3,200 but have since revised that higher. That would be an increase, believe it or not, of just 10%. The index would push higher to resistance at the long-term uptrend which has been in place since April 2012. From there I would need to re-assess, but calling a 10% in advance in the S&P is not as easy as you’d think.

Believe it or not even at 3,300, the S&P 500 would be trading at just 18 times my 2020 S&P 500 earnings estimates of $183.18 per share.

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Biotech (XBI)

The XBI may be about to push towards $89, after breaking a downtrend and finding support at $87.50

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Tesla (TSLA)

Tesla is rising in the after hours, breaking above the December downtrend. The results are impressive with deliveries coming in at 95,200 vehicles. The bad news is that it is now the second quarter in a row that Tesla has seen Model S/X delivers of around 15,000. Remember the two cars use have production of about 25,000 per quarter. It may be because of the price mix, as TSLA has eliminated the lower Kwh battery variants, making only the more expensive cars more available. We will have to see what the company says when they report quarterly results.

The chart shows that the stock is rising to around $241. You can see that downtrend is broken, likely pushing the stock towards $250.

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Square (SQ)

Square is nearing a big break out at $75, with a rising triangle forming, a bullish continuation pattern. It could send the stock on to $83.

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JD (JD)

JD.com is getting close to breaking out and could be on its way to around $34.80.

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Facebook (FB)

The pattern in Facebook looks ominous, with the rising wedge. It suggests a decline to around $186.

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