[Market Outlook] Don’t Argue With The Generals In July Until…

Don't Argue With The Generals In July Until…

July often sets up conditions for late summer rallies, as well as significant tops. As a result, July can be a frustrating and confusing period. Last week was a good example of why. I'll start with the bearish case…

#1) The market's price action coming into last week set up the market indexes for a weak Monday, and weekend reports of rapidly increasing (and breakthrough cases) of the Covid Delta variant provided the news for a "news follows the markets Monday plunge." In other words, the market was beginning to roll over before Monday, but it needed a more identifiable reason to make it obvious. #2) Mid-July is a seasonal high time frame, so the markets' weakness coming into last Monday furthered the bear's case for being cautious (if not down-right bearish) during last Monday's sell-off. #3) Our Risk Gauges were bearish, and several of the general stock indexes had bearish momentum readings suggesting breaks of support would lead to further declines. With such a bearish list of conditions, why didn't the market follow through to the downside, and how could you have trusted the rally would continue? Click below to read why the QQQ and SPY recovered so quickly last week, and get this week's Market Outlook highlights and video analysis. Click here for the Free Video and Market Highlights Click here for the Premium Video and Market Highlights Best wishes for your trading, Keith Schneider CEO MarketGauge

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