Weekly Stock Market Forecast for July 2nd, 2017
Stock Market Forecast – The month and quarter end are here, as bears press equity markets.
Equities had a rocky ride this week, finishing the second quarter of 2017. Mutual funds and institutional money was rebalancing their portfolios and it looked like we held a bearish sentiment into the close on Firday – with Nasdaq getting hit the hardest down 1.7%.
The SP500 dropped just 0.59%, while the DOW dropped 0.33%.
The only market that squeezed out gains in the equities sector was the Russell 2000 index.
Stock Market Forecast – FAANG stocks continued to slide this week, re-testing the lows established around mid-June which pulled the Nasdaq lower.
The top right chart below shows individual stocks for the past week.
You can see that all stocks slide Monday and Tuesday. Wednesday was a pull back day before getting rocked again on Thursday.
Apple and FB finished Friday stronger, while Amazon and Netflix were sharply lower. Google finished Friday on weekly lows, performing the worst.
Stock Market Forecast – Safe have assets get clobbered last week.
Last week was a bad one for assets that typically go up when there is perceived risk in the market.
30 year T bond futures got smacked a total of 1.77%.
Gold was down 1.32% overall this week, with the worst day being the Monday.
The US dollar dropped a whopping 1.82% and is now trading on annual lows.
Stock Market Forecast – Oil prices soar 7.5% in one week!
We were beating the drum that the failure to break below $42 would end up triggering some buy stops to the upside after seeing a smaller build then expected out of the inventory report this Tuesday.
Our most optimistic upside target was $46.15, which oil surpassed by the close Friday.
It was a great trading week as we rode the move higher as short sellers were squeezed higher.
What’s next in oil?
We think selling pressure will return this week after we round out this top.
The seasonality index is showing us upcoming weakness in oil prices that start in early July.
Click here if you want to learn more about stock market seasonality.
Our Stock Market Forecast for Next Week
We think the summer mode is strongly upon us, with markets looking comfortable sitting in a range.
Also, equities close early on Monday at 1PM EST. All trading in the US is closed on Tuesday in observance of Independence Day. The futures re-open on Tuesday July 4th at 6PM EST and stocks reopen for trading on Wednesday morning.
Expect to see light volume through the Monday session before the early close. The next few days would actually be a great time to take a few days off and get a rare 4 day weekend as a trader.
If we break below 2,420 and hold the level, the bears will take control and move prices lower in the SP500. Otherwise, the market is stuck in the 20 point range between 2,420 and 2,440.
We are seeing oil as neutral, and if we see a topping pattern on the daily we will start building a short position. Nothing has changed in oil, it is still and oversupplied and under demanded market.
If gold holds the $1,240 level early on in the week, we can see a run higher to $1,250 quickly.
Watch how prices move near supports and resistances, as a few markets are on the cusp of a big break out and giant move.
I still think the next 50 handles in the SP500 is to the downside – but it might happen later in August when seasonal trends prevail.
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Have a great day, and I wish you great trading this week full of patience, diligence and discipline.
The information contained in this post is solely for educational purposes, and does not constitute investment advice. The risk of trading in securities markets can be substantial. You should carefully consider if engaging in such activity is suitable to your own financial situation. TRADEPRO Academy is not responsible for any liabilities arising as a result of your market involvement or individual trade activities.