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July 2024 Market Review: A Mixed Performance with Bulls and Bears Battling for Dominance

Weekly Market Review: July 22-26, 2024

Weekly Market Review: July 22-26, 2024

Introduction

The week of July 22-26, 2024, was characterized by mixed performances across major indices, highlighting the market's fluctuating nature. While the Dow Jones and Russell 2000 managed to post gains, the Nasdaq and S&P 500 faced declines. This analysis will delve into the week’s price movements, market trends, breadth, correlations, and provide a forecast for the upcoming week.

Price Movements

Key Indices Performance

  • Dow Jones: Up 301 points
  • Nasdaq: Down 369 points
  • Russell 2000: Up 75 points
  • S&P 500 (SPX): Down 45 points

The mixed results indicate a week of partial gains and losses, with the Dow Jones and Russell 2000 showing strength, while the Nasdaq and S&P 500 struggled.

Exhaustion Indicators

  • S&P 500: The price is currently at the second standard deviation on a daily basis, indicating potential exhaustion.
  • Nasdaq: Similarly, the price is below the second standard deviation, suggesting it is pulling back.
  • FD Cloud Delta: The Nasdaq has a delta of -1.25, indicating it is within the cloud, while the S&P 500 is just above the cloud. The deviation suggests an 84-point gap above the current prices, hinting at a possible turnaround unless deeper movement into the cloud occurs.

Market Trends

Short-Term and Long-Term Trends

  • Nasdaq and S&P 500: Short-term trends (hourly) are down, while daily trends remain up.
  • Russell 2000: Both short-term and long-term trends are up, indicating strong performance and momentum.

Market Breadth and Sentiment

  • Fear and Greed Index: Currently at 45, indicating a neutral stance. This is just above the fear range and down from 49 last week. A month ago, it was at 47, and a year ago, it was at 80, indicating a significant shift from extreme greed to neutrality.
  • VIX: Stands at 16 points, within the 14-20 range, suggesting moderate volatility.
  • SKEW: At 131, indicating normal hedging activity with no significant fear.
  • Put/Call Ratios:
    • CPC: 1.04
    • CPCI: 1.31
    These ratios suggest a slightly higher inclination towards puts, indicating some caution among traders.

Market Correlations

  • S&P 500 and Nasdaq: Highly correlated at 97%.
  • Russell 2000: 46% positively correlated with the S&P 500 and Nasdaq, indicating some divergence.
  • Volatility (VIX): 10% negatively correlated with the S&P 500.
  • Bonds, Gold, Oil: Positively correlated with the S&P 500.
  • Bitcoin, USD, Copper: Negatively correlated with the S&P 500.
  • Copper Price: In the first standard deviation and turning around.
  • Gold Price: In the first standard deviation and turning around.

Market Breadth

  • Momentum: High to neutral, indicating mixed signals.
  • Stock Price Strength: In the greed area.
  • Stock Price Breadth: Neutral.
  • Put/Call Ratio: In the fear range, suggesting more call buyers than put buyers.
  • Market Volatility: In the fear range at 16.
  • Safe Haven Demand: In the extreme fear range, indicating low interest in safe-haven assets like bonds.
  • Junk Bonds: Showing increased activity, reflecting some risk appetite.

Future Price Action

Here are the forecasted price ranges for the upcoming week:

Symbol Upside Downside Deviation
SPX 5537 5376 80.5
NDX 19464 18660 402
Russell 2309 2213 48

Upcoming Market-Changing News

Next week, several key economic reports and earnings announcements are scheduled, including:

  • CBI Distribution Trades
  • Six-Month Bill Auction
  • GDP Flash Report
  • CPI and PPI Reporting
  • Unemployment Rate News
  • Retail Sales Data

These reports will provide crucial insights into the economy and significantly impact market movements. Investors should monitor these releases closely.

Conclusion

The week of July 22-26, 2024, demonstrated the market's mixed nature, with some indices gaining while others declined. The Dow Jones and Russell 2000 showed strength, while the Nasdaq and S&P 500 faced downward pressure. The market sentiment remains neutral, with indicators pointing towards potential volatility.

As we look ahead, it's essential to stay vigilant and responsive to economic reports and market signals. The upcoming week promises to be eventful with significant economic data releases. Understanding the interplay between these indicators and market trends will be crucial for navigating the dynamic landscape and making informed investment decisions.

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