Monthly #SP500,#NASDAQ Forecast: July 2023

S&P 500 Forecast: July 2023

The S&P 500 has been bullish during most of the month of June, and it’s possible that we may have a little bit of a cooling period for the month of July. While I don’t necessarily think that we are going to fall apart, I do think that it’s the situation that the market has gotten a little bit ahead of itself, especially when you talk about technology stocks. It’s probably worth noting that as we exit June, we are in a blackout period for corporate buybacks, so you do not have that added inflow.

A lot will be riding on the US dollar and interest rates. While we have been melting up, the reality is that the market will continue to see a lot of noise more than anything else, and I think that a pullback toward the 4200 level makes a certain amount of sense. That was a previous resistance level, and we also have the 50-Week EMA racing toward that area, and it does suggest that the area should be rather massive support, was from a technical analysis standpoint and market memory. If we break down below there, then it’s possible that the market could drop to the 4000 level, but all things being equal I think we are more likely than not going to see more of a “buy on the dip” mentality.

However, be cognizant of the interest rate situation, because if interest rates continue to get very heated in the United States, that could very well beat up on the S&P 500.

• The Federal Reserve is suggesting to more interest rate hikes, but as things stand right now the economy is at least trying to cope with it.
• Employment will be a major factor as well, and the reality is that in the past we have seen recessions start like this.
• We have seen the market run up really fast, only to turn around and fall apart after reality smacks it in the face.
• Pay very close to that 4200 level, because if we break down below there things could get ugly.

On the other hand, we break above the 4500 level, then it’s likely that we could get looking to the 4800 level given enough time. As things stand right now, it would not surprise me at all to simply trade between 4200 underneath and 4500 above.

NASDAQ 100 Forecast: July 2023

Quite frankly, the market desperately needs to pull back, so don’t be surprised at all to see a slightly negative month of July.

• The NASDAQ 100 rallied rather significantly during the month of June, and therefore it looks as if we are testing a major breakout.
• It’s worth paying attention to the 15,250 level because it is an area that has offered significant resistance recently, and historically speaking it has been important.
• That being said, you should pay close attention to the fact that the market may be running ahead of itself.

It’s Just 7 Stocks that Move the NASDAQ

We have gone somewhat parabolic but is also worth noting that there are only about 7 stocks that account for about 30% of the overall value of the NASDAQ 100. Because of this, you need to be aware of what’s going on with Tesla, Adobe, etc.

At this point, it looks like everybody is running with the “AI” narrative. That is one thing that Wall Street is really good at, coming up with a new narrative to sell stocks to people. Remember, that’s their job and therefore you have to be cognizant of the possibility that we are in a bubble. In fact, we have been in a major bubble for several years now, and we have seen it bust in various assets. As it stands right now, the NASDAQ 100 still is performing quite well. However, it seems like the market wants to jump into one asset followed by the next, leaving the original one in the thoughts. Think Bitcoin, or perhaps even the other recent narratives such as all things blockchain.

Underneath, the 14,600 level should be supported, but if we break down below there then we could go looking to the 13,750 level. The 13,750 level is an area that has been important in the past, and it’s probably worth noting that the 50-Week EMA sits right around the 13,000 level as well. Because of this, I do anticipate that we would see a lot of traders getting involved in that region. Anything below there would obviously be devastating for the NASDAQ 100, but I just don’t see that happening anytime soon. Quite frankly, the market desperately needs to pull back, so don’t be surprised at all to see a slightly negative month of July. However, if we clear that 15,250 level, then we will almost certainly see the market target the 16,000 level next. I expect a lot of volatility, but as things stand right now, you have to look at pullbacks as potential value.

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