Monthly Forecast of #SP500 & #Nasdaq : June 2023

Nasdaq Forecast: June 2023

The NASDAQ 100 has been on an absolute tear to the outside recently, and it looks as if the market is going to continue to find plenty of reasons to be bullish, mainly due to the idea of liquidity. However, it’s probably worth noting that we are getting a bit stretched at the end of the month in May, so I do anticipate that we will eventually have a bit of a selloff. That selloff could present some opportunities.

I recognize that the stock market and the economy are completely divorced from each other at the moment, and I don’t know that it’s going to change anytime soon. After all, Wall Street is more worried about cheap liquidity coming out of the Federal Reserve than anything else. Yes, there is probably a reckoning coming, and we have seen moves like this in 1999, 2001, and 2008 previously. You get some type of massive bounce, and then a significant selloff.

Earnings be damned, this seems to be a market that’s willing to look past all of that, although a couple of companies have come out with strong statements. However, the latest bubble, artificial intelligence, is probably something that’s being overdone. That’s the job of Wall Street, to sell stocks to you, and in order to do so they come up with a narrative. At one point, it was all things related to blockchain. Going back far enough, it was everything that had a “.com” in its name, as we started to see the Internet take off. Now it’s all about artificial intelligence. The question is whether or not artificial intelligence is something that can drive the entire economy. It’s not that AI won’t be a big part of our lives down the road, it’s just that you are probably asking quite a bit for this to sustain its momentum.

Technical Outlook

• As the charts look, I suspect that a move toward the 13,750 level could be in the cards, and perhaps even down to the 13,500 level.
• In that area, I would anticipate that a lot of “FOMO traders” will reenter the market.
• If the market breaks down below the 50-Week EMA, presently just below the 13,000 level, we could see a further selloff at this point, perhaps driving this market down to the 12,000 level next.

In general, indices are manipulated to the upside, based upon how they are not equal weighted. Remember, it’s just 7 stocks that move this index at the end of the day.

S&P 500 Forecast: June 2023

Stock markets have been very bullish as of late, especially technology stocks. However, the S&P 500 is lagging just a bit, and at this point it looks like we are breaking out a significant consolidation area having said that, the market is likely to see a lot of noisy behavior, and it’s worth noting that the 4300 level has been an area that is significant resistance based on the previous action.

• Looking at this chart, it’s likely that we would see a little bit of noise in that area.
• It’s probably only a matter of time before we see a little bit of a pushback if we get there.
• The market is likely to continue to see the area as a target, but if we break above there, then it’s likely that we could go higher, perhaps entering more or less a “buy-and-hold” situation.

With this being the case, I think it’s a situation where even if we do pull back from here, the bottom of the overall consolidation of the last couple of months, we would be testing the 50-Week EMA, and I think that is the bottom of the market right now.

In general, this is a market that I think continues to show a “buy on the dip” attitude, just as most stock markets do. In general, this is a situation where I think the buyers will continue to return due to the fact that there are plenty of narratives out there to get people excited. Remember, for Wall Street it’s all about the narrative, and right now that’s all about “artificial intelligence”, and the idea that the Federal Reserve may be forced to loosen monetary policy, as the banks in America have seen a lot of stress. Nonetheless, as things stand right now Wall Street continues to pound the idea of cheap monetary policy as being a potential driver of stocks to the upside. In general, this is a market that I think will find reasons to go higher, at least until we break down below the 50-Week EMA. If we were to break down below there, then it’s possible that we could go down to the 3800 level. The 3800 level course is an area that has been important in the past so that’s worth paying close attention to.

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