S&P dragged down by US politics

22 jul

Last week, the market was significantly affected by political uncertainty in the US. Technically, everything looked decent, and there was no change in fundamentals as inflation continued to slow down and banks reported positively. Given this, I was expecting a rotation within a narrow range, but the uncertainty was too strong, causing a sell-off in all major sectors (see Market Strength Index). The only sector that showed some resilience was Financials, but even it eventually succumbed. The week closed very weak, with a bearish engulfing candle, which formally starts a weekly consolidation.

It is important to remember that the market is still in a weekly uptrend, and we should treat weekly consolidations as short-term pullbacks until the price sets a convincing lower high on the weekly chart. I would expect the price to try retesting the gap from Wednesday, the 17th. Whether this retest is successful or not will determine the future of the market. It is also likely that in the coming months, the market will be very sensitive to political developments.

Disclaimer
I don't give trading or investing advice, just sharing my thoughts.

22 jul

Nota

There was a complete change of tone today. The price action provides sufficient evidence for me to change my outlook from "bearish" to "neutral".
Firstly, the market opened with a small gap up and was able to hold it. Secondly, bulls confirmed an hourly uptrend. Finally, the market built a value area above Friday’s high and held it into the close.

24 jul

Nota

Bulls failed to sustain rally after price went above Monday's high. If bears are strong they will easily drive price below 548, thus confirming daily downtrend. Lots depends on Tech's earnings

25 jul

Nota

Strong sell-off, all major sectors are down. The support zone got broken. Next level to watch is 535-538

26 jul

Nota

Price reacted to 538, rallying in the morning session. Still the day closed red with majority of the big sectors down.