Last Friday was relevant, the SP500 experienced an inside Day.
Bears failed to make a lower low, and bulls managed to reach the previous day’s high which did not hold.
The top chart on the right confirms that the #SP500 had two negative weeks in a row; the last time we had three consecutive negative weeks was in April. The bottom chart on the right confirms that each quarter of 2024 was positive, showing that Q1 confirmed the break above 4500, which has not been retested yet.
Summer months, particularly August, can be periods for the market where new moves can get confirmed. This year, given the 14.45% year-to-date (YTD) return and the upcoming US elections, most of the people I talk to cannot give a proper direction. The hedge were I managed investments are not highlighting a clearer path than in January for the second half of the year, which is not bad.
Most investment analysts expected a negative year and are finding the opposite, one of them they even stopped to give guidance because they don’t “support” the current market state. Volatility is quite low, so there is room for much higher opportunities. Furthermore, interest rate analysts are talking about rate cuts; I will update the model once is confirmed. For the last year, we have been taking advantage of the interest rates provided by the Treasury Bills. A few cuts taking it 1% lower is not likely to change the macro view, especially if countries continue to deficits.
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