Tuesday Talk: Short Week Fourth
Will July 2024 stick to tradition? From 1928, the S&P 500 has experienced an average gain of 1.7% in July and ended higher more than 60% of the time. The chart below courtesy of The Motley Fool, shows what investors might expect from this month.
We shall see. This week is a short trading week due to the Fourth of July holiday. On Wednesday, July 3, markets will close early at 1:00 p.m. and then will be closed all day Thursday, July 4.
Yesterday the S&P 500 closed at 5,475, up 15 points, the Dow closed at 39,170, up 51 points, and the Nasdaq Composite closed at 17,879, up 147 points.
Chart: The New York Times
Most actives were led by Nvidia (NVDA), up 0.7%, followed by Tesla (TSLA), up 6.1% and Ford (F), up 1.8%.
Chart: The New York Times
In morning futures trading S&P 500 market futures are down 21 points, Dow market futures are down 110 points, and Nasdaq 100 market futures are down 93 points.
TalkMarkets contributor Kiana Danial asks Is Now A Good Time To Invest In The S&P 500?
"We are in the midst of a bull market. The ongoing bull market has been associated with optimism that the Federal Reserve can navigate a soft landing for the U.S. economy as it brings inflation down from more than 40-year highs.
Economists had feared a recession was imminent after the Federal Reserve dramatically raised interest rates. However, the labor market has shown resilience, and inflation has been consistently declining in recent times.
The chart above illustrates the S&P 500’s three recent bull markets (SPX, SPY).
Bull Market of 2009-2020- The Great Recession Recovery
Duration: 132 months
S&P 500 Return: 397.8%
Bull Market of 2020-2022- The Pandemic Rally
Duration: 21 months
S&P 500 Return: 118.2%
Bull Market of 2022-2023- Post-Pandemic Recovery
Duration: 21 months-current
S&P 500 Return: 52.93%
Predicting when a bull market will end is difficult, as market cycles can be influenced by many factors such as economic data, geopolitical events, and investor sentiment.
The principle of “time in the market, not timing the market” emphasizes the strategy of staying invested over the long term, rather than attempting to buy and sell stocks based on short-term market movements."
See the full article for additional background information on the S&P 500 Index.
Chartist and contributor Tim Ord says SPX Shows Bullish Signals.
"The second window up from the bottom is the monthly SPX/VIX ratio and the next higher window is the monthly SPX. Intermediate highs can form when the monthly SPX makes higher highs and the monthly SPX/VIX ratio makes lower highs. This chart goes back to mid-2016. We pointed out the times when the monthly SPX made higher highs and the monthly SPX/VIX ratio made lower highs (noted shaded pink). Currently, we have the SPX making higher highs and the SPX/VIX ratio making higher highs giving the “all clear” for now. Staying long the SPX for now."
See Tim's full article for additional charts and analysis.
Contributor Tim Knight who is usually a bearish chartist gets blown away when finding that Tesla Surpasses Resistance; Rivian Shows Promising Base With Rising Volume.
"
Tesla (TSLA) has blown right past its long-standing gap and Fibonacci resistance. This is impressive!
I would also say that Rivian (RIVN) is sporting a handsome-looking base with a strong pick-up in volume."
TM contributor Crispus Nyaga notes that Bitcoin Rises Above The Ichimoku Cloud On The 4H Chart.
"Bullish view
- Buy the BTC/USD pair and set a take-profit at 65,000.
- Add a stop-loss at 61,500.
- Timeline: 1-2 days.
Bearish view
- Set a sell-stop at 63,000 and a take-profit at 60,000.
- Add a stop-loss at 65,000.
Bitcoin (BITCOMP) price continued its recovery on Tuesday as investors continued to buy the dip. The BTC/USD pair soared to a high of 63,783, its highest point since June 23rd and almost 10% from its lowest swing in June...
Bitcoin rebounded as investors embraced a risk-on sentiment in the market after the French election. This view was supported by the fact that American and European stocks continued rallying while the US dollar index (DXY) pulled back. Bitcoin does well when there is a risk-on sentiment in the market...
The 4H chart shows that the price of Bitcoin bottomed at $58,408 on June 24th and has rebounded to over 63,783, its highest point on June 23rd. It has moved inside the 50% and 38.2% Fibonacci Retracement point...
BTC/USD has also risen above the Ichimoku cloud indicator, meaning that bulls are in control. Therefore, Bitcoin could continue in the next few days as buyers target the psychological level of 65,000. A move above that level could then see it retest the 38.2% retracement point at 66,085. The alternative scenario is where the pair retreats and retests the support at 60,000."
Tracking oil on the way out, TalkMarkets contributor Lallalit Srijandorn notes WTI Gains Ground Above $83.50 On Geopolitical Risks, Summer Demand Optimism.
"West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $83.60 on Tuesday. The rise of the WTI price is bolstered by renewed fears of Middle East geopolitical risks and expectations of rising summer fuel demand.
Oil traders have added long positions amid worries that tensions between Israel and the Iran-backed Hezbollah militia in Lebanon could spread and reduce global oil supplies. This, in turn, might lift the black gold in the near term. Additionally, the Atlantic weather season remains a concern, with Hurricane Beryl barreling through the Caribbean as a Category 4 storm, said Phil Flynn, senior market analyst at the Price Futures Group.
Apart from this, strong summer driving demand is likely to boost WTI prices for the time being. Last week, the Energy Information Administration (EIA) showed that both output and demand for main petroleum products reached a four-month high in April."
Caveat Emptor.
Have a good one.
Peace.
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Thoughts For Thursday: AI Is Still Ascending
Good roundup.