Weekend Report for Monday, July 6

Weekend Report for Monday, July 6

The New York Composite, the Dow, and the Equal Weight S&P all made new all-time highs on Thursday and for the week. The Russell made a new all-time high on Wednesday.

Then we have the SPX and the NDX in a different market condition, which is multi-week balance, but the bull trend remains intact. There is continued divergence between the NDX, SPX, and the other indices as we have this continual rotational market, but there is nothing that suggests, from an objective perspective, that the bull market is about to come to an end.

I continue to remind and will remind until the end of the bull market, the initial signal that we began a bear market is when all the indices begin closing below important levels. That level starts with the previous day’s cash session close. One of these days we will have an event and all the indices will probably have a wide range down day and will close below the previous cash session low. That will be the initial signal that something could be developing to the downside of larger degree in price and time than anything that we’ve seen since at least the April 2026 low.

PDF: Weekend Report_2026_07_04
VIDEO: https://youtu.be/1eInjXQZuvs

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Auction Market / Market Profile Update

The second quarter of 2026 has now come to an end. It is an interesting analog to go back and look at the 2025 second quarter in both the NDX and the SPX. I have been displaying the progress of the quarterly profile for several weeks now. I had been saying consistently that the rate of change that we experienced in the second quarter in the SPX and NDX would not continue and that actually began to come to pass three or four weeks ago. Now we are deep into a rotational market in the SPX and NDX, though they are hanging around recent highs, as you can see from both a Market Profile and bar chart perspective.

It is insightful to look at what happened in 2025 in the 3rd and 4th quarters. The SPX and NDX did trade considerably higher. The SPX traded 9% higher from the high of the second quarter into the end of the year. However, it did so in an extremely different fashion than the rally it experienced in the 2nd quarter. The 2nd quarter rally was very similar to, almost identical actually in terms of structure, to the 2nd quarter rally of 2026, except actually in 2025 it was even more extreme.

I think that the best case for the SPX and NDX would be something similar to what we saw in 2025. What we saw was a market that was persistently higher, however it was extremely rotational. The week-to-week and day-to-day rotations in terms of price, you had weeks that were down and days that took out previous day lows. It was still very bid because the market would immediately recover after every single retracement and it did so into the end of the year.

Intraday trade is likely to become more predominantly rotational.

It is increasingly likely we see a retracement greater in time and magnitude than any that has occurred since the March low. The 2025 analog is the best case scenario.

SPX Auctions