Weekend Report for Monday, July 07

Bottom Line:

From last weekend’s update:

The big question remains: How will the continued disparity among the US indices be resolved? Is the US stock market forming a major top, with the SPX and NDX simply the last two indices to get the message, or are the other indices about to begin to show relative strength and begin to catch up with the SPX and NDX? 

I will continue to remind: ALL bear markets, bull markets and significant tops and bottoms will have the indices pulling in the same general direction. Price action is inconsistent and “out of synch” and has been so rather dramatically since mid-May.

This is very likely to change, soon.

There is no “resistance” above Friday’s highs in the SPX and NDX.

The immediate levels that are important are highlighted on the charts. This is a wonderful time NOT to overthink this; let price action be your guide.

The predominant assumption appears to be that the current spate of divergences is signaling a top of significance. This may be true, BUT…..if these divergences resolve themselves differently than most are assuming they will then we could actually see acceleration UP very soon.

So, back to actual price action. If the DOW, RUT, NYA begin taking out upside levels it is likely the current divergences are going to resolve bullishly.

PDF: Weekend Report_2024_07_07

VIDEO

SPX

Upper KRA: 5785-5813
Lower KRAs: 5446; 5402

Retracements since the April 19 low have been shallow and short-lived. There have been two primary legs up since that low, and IF this rally is similar it projects to 5785-5813 (about 4% higher from today’s high print) before we see another 1%+ retracement. 

Note that the 5446 downside KRA is about 2.24% lower from Friday’s high print, which is in the ballpark of the most extreme retracements since the April low.

NDX

Upper KRA: 21308-21402
Lower KRA: 19472

The NDX is in an almost identical structure as the SPX. Retracements since the April 19 low have been shallow and short-lived. There have been two primary legs up since that low, and IF this rally is similar it projects to 21308-21402 (about 4-5% higher from today’s high print) before we see another 1%+ retracement. 

Note that the 19474 downside KRA is about 4.57% lower from Friday’s high print, which would make it the most extreme retracement since April low.

DOW

Upper KRA: 39571; 40088
Lower KRAs: 38904

The DOW is in a well-defined very mature Balance Area. It is testing the upper extreme of that Balance Area. Strength above 39571 is likely very bullish, at least short-term.

RUT

Upper KRA: 2059
Lower KRAs: 1993

Choppy and trendless and sitting between important pivots.

New York Composite

This is an index of every stock listed on the NYSE, so it is a broad composite view. 

Upper KRA: 18189; 18421
Lower KRAs: 17928; 17713

Strength above 18189 is likely very bullish, at least short-term.

SPX Profile

From last weekend’s Report:

We’ve been following the SPX profile daily in the Membership updates. This view reflects that the SPX needs to close above 5470 to restore a bullish scenario.

Updated SPX Profile:

The Auction for July is dead vertical, lacking any semblance of development. It always occurs, but it is too early to be guessing at the potential upper extreme of the current distribution. 

Internals

This can’t get any closer to “something has to give”. 

US 10-yr. Notes

Notes appear to want to test 111’02.

US Dollar

Between significant levels.

Gold

No change: Getting “overdue” for a test of either upper or lower critical levels.

Crude

Short-term trend is up. In a minor Balance Area.