Updated Every Saturday by 8pm PST
Weekly Stock Market Update & Forecast: June 29th, 2024
A mixed week with the Dow Jones down 32 points (-0.01%) and the Nasdaq up 43 points (+0.24%)
An interesting end to the week with the NDX/SPX putting in slightly higher highs on Friday.
If you would recall, in last week’s update and on Monday we stated the following…..
“Our work suggests we have already seen the top on the Dow and we are now simply waiting for a complex top formation to complete on the NDX/SPX. And while it is possible the top of this bull run is in as of last week for the NDX/SPX (30% probability), slightly higher highs are likely (70%) as per our previously discussed targets”.
In other words, we were waiting and looking for a market confirmation on whether or not the top was in due to the fact that prior tops on both the NDX/SPX either came in or were within the margin of error of our final targets. With June 17th (+/- 2 trading days) acting as a potential TIME trigger.
Friday’s all time highs on the NDX/SPX seemed to resolve this debate in favor of our primary scenario that we will get a more direct hit into the targets below. Now, most likely, around July 19th.
Yet, it is not quite that simple. Friday’s all time highs on the NDX/SPX were only marginally higher and could be considered as a short-term double top formation. As a result, I would shift our probabilities slightly, but would keep the overall forecast the same.
Let’s state the following. While it is possible the top of this bull run is in as of this week for the NDX/SPX (20% probability), slightly higher highs are likely (80%) as per our previously discussed targets.
As you know, over the past few weeks we slightly adjusted our forecast to suggest while the Dow topped perfectly on April 1st and May 20th (double top formation), the NDX/SPX are still looking for their respective tops. Hence, this complex market top formation.
Since then, we have offered the following targeting. A more exact 18,250 (+/- 50 points) target on the Nasdaq and a more variable 5,600 (+/- 100 points) target on the SPX. With June 17th (+/- 2 trading days) being one of the likely TIME junctures. The next TIME turning point of interest arrives around July 19th.
On Friday the SPX topped at 5,523 and the Nasdaq pushed just slightly above 18K. In terms of SPX, that could be considered a perfect Time/Price hit. In terms of the Nasdaq, while the index definitely came within the margin of error, it did not reach its ideal target. Yet, as I have mentioned before, the Nasdaq tends to “misfire” more often than others.
What are we to make of all of this?
Well, let’s observe the market very closely going forward. If the NDX/SPX begin to sell-off 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.
If, however, we continue to push higher, above this week’s highs on the NDX/SPX, we would have to assume the market is indeed looking for better targets within that 18,250 range on the Nasdaq. This would also suggest the TIME turning point has shifted to a TIME juncture arriving in July (more on that if this move develops).
Otherwise, everything else remains in force. Let’s very quickly review last week’s update……
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.
Once again, in our prior weekly update we theorized that if the NDX/SPX were to push 2% higher the week of June 10th, they would shift gears into a slightly higher high as their completion points. At the same time, that would not necessarily mean the Dow would see a higher high as its April 1st and May 21st hits were perfect.
I believe we are dealing with this precise scenario.
Luckily, we have exact projections for both. Our calculations show the Nasdaq has a clear target at 18,250 (+/- 50 points) while the SPX has a bit more variable target at 5,600 (+/- 100 points). Both indices are now very close to their respective completion points.
The question is, when?
The next TIME turning point of interest arrives on June 17th (+/- 2 trading days). At appears, at least for the time being, the market might line up into this point. Having said that, if the indices correct over the next few days, avoiding this TIME/PRICE juncture, the next point will arrive in July. And if the latter is the case, we are in for a bit more of this mind numbing trading range – at least on the Dow/NYA/RUT.
Next week is important in terms of looking for any signs of the SPX/NDX top. As soon as the NDX/SPX complete their bullish patterns the market should reverse into a severe bear. With the Dow confirming first by breaking below April lows.
In summary, the market is putting in a complex top. 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.
End of Update ————–