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Weekly Stock Market Update & Forecast: July 6th, 2024
A positive week with the Dow Jones up 257 points (+0.65%) and the Nasdaq up 620 points (+3.50%)
The state of today’s divergence between the Nasdaq and the Dow is quite significant. While the Dow remains 1.5% below recent highs, the Nasdaq has been able to gain 10.8% off of the same juncture.
If we could summarize our primary indices….
- The Dow (our primary analytical index): As of this writing the Dow has delivered a perfect hit on our top projection that we first identified as early as mid 2022. The double top formation we saw on April 1st and May 20th works. We have discussed this many times before.
- The S&P 500: As we have talked about over the past few weeks, after the SPX pushed above resistance on the week of June 10th we had to adjust our forecast slightly and issue a higher set of targets for both the SPX/NDX. For the SPX this target was 5,600 (+/- 100 points). We are well within this range today.
- The Nasdaq: As above, the new target for the Nasdaq was 18,250 (+/- 50 points). Friday’s high of 18,366 is just at the end of this range.
What are we to make of this?
Well, our primary statement remains…..
That is to say, the entire affair is turning into a complex market top formation. And while the Dow has topped perfectly in April-May, the NDX/SPX are still looking for their respective tops. We are nearly there.
In terms of the SPX, everything is within range and the next TIME turning point of interest arrives around July 19th (+/- 2 trading days). The SPX can remain range bound or even push higher into that range. Our parameters allow for that to happen.
It is now becoming evident that the Nasdaq is in some sort of a parabolic blow off top stage with only a few companies driving it higher. And while the index remains within the confines of our original target of 18,250 (+/- 50 points) for the time being, it is beginning to push outside of this range. Suggesting it wants to go even higher or into its next point of force.
Now, a lot of “ifs” can be said about the Nasdaq here. Out of all the majors it is the least accurate, it tends to push at the margins in both directions, time variables are not as clear, etc…. In other words, the Nasdaq is making the least sense here.
As a result, I think it would be best if we simple concentrate on the DJX/SPX at this time as these indices continue to make perfect sense. In that regard our overall conclusion remains. While it would be ideal for the NDX/SPX to top around July 19th, our next TIME turning point of interest, the market is free to initiate its decline at any time now. As we have mention before, the PRICE variable is the primary at this time and all PRICE targets have now been satisfied.
That is to say, if the NDX/SPX/DJI begin to sell-off going forward in a structurally sound way, we would have to assume the top is indeed in. At that juncture we will be able to put in some trading triggers.
In summary, the market is putting in a complex top. And while the Dow has achieved a perfect hit on its Time/Price projection, the NDX/SPX are still looking for their respective tops. Our new price projections for these indices suggest they are nearly there and we are now on the lookout for a structurally sound sell-off that would confirm that the top is indeed in.
End of Update ————–