How much pain can bears endure in the stock market?

There was no doubt at the beginning of last week that both traders and investors were concerned about the stock market ahead of the FOMC meetings as well as the big tech profits. The Wall Street Journal hung That “a mixed batch of earnings reports tracked an uneasy path forward for markets ahead of this week’s important Federal Reserve meeting.”

Technology stocks fell sharply on July 22second abbreviation In response to Snap’s dismal earnings, some of the biggest tech companies that were due to report this week have been dumped. (AMZN) for example is down 8% from July 22second abbreviation Until July 26 to close at $114.81. Those who sold will likely feel some regret by the end of the week as AMZN closed at $134. 95 more than 10% increase for the week. Other defeated tech giants like Microsoft
(MSFT) It was also a good week, up 7.8% to close at $280.74. MSFT recorded a Tuesday low of $249.57.

MSFT’s post-earnings action was alongside the action in S&P futures (see tweet) indicates that Tuesday’s market pullback is over. The strong opening on Wednesday also supported the upside.

Of course, those who were short with big tech names had a worse week. Technical studies indicated last week To be pressed shorts They certainly did.

Last week’s strong gains and impressive monthly performance in June were not enough to convince many that stocks could go higher.

The drop in yields boosted the Dow Jones Average Interest (UTIL in US dollars) to 6.6% for the week with the Dow Jones Transportation Index not far off as it was up 5.8%. $UTIL is the only year-to-date average among the above table averages.

There were also strong gains in the Nasdaq 100 and Standard & Poor’s 500, which rose by 4.5% and 4.3%, respectively. Both are still showing double-digit year-to-date losses while Dow Jones Industrials’ 3% gain led to a 9.6% loss for the year. SPDR Gold Shares (GLD
) made a decent gain of 2.1% during the week.

What about market movement? There was a significant improvement last week in the forecast of the Spyder Trust (SPY
Preparatory Year

It closed well above the 38.2% Fib resistance at $407.17 and the 20-week moving average at $406.89. The 50% level is at $421.08 and a close in the S&P 500 above 4200 is likely to attract market attention. The 61.8% resistance is located at $434.98 with the weekly downtrend, line A, slightly higher.

Standard & Poor’s 500 weekly Progress/Rejection line It was very strong last week as it closed above the resistance level (Line C) which indicates that Significant drop in place. The WMA is trying to turn higher and needs to maintain all retracements. Only NYSE Weekly A/D and NYSE stocks closed all A/D lines (not shown) the week above moving averages and resistance.

Not all stocks performed well last week, while (AMZN) prices rose on Friday in response to its earnings, Intel
INTC stock fell to close down 8.56% for the day. Work at Apple
(AAPL) confirmed positive signs on OBV in June when the buy side was favored and it rose another 3.28% on Friday.

All of these stocks are part of Invesco QQQ
Trust (QQQ), which fell back to the 20-day moving average on Tuesday before rallying sharply. The 38.2% Fibonacci retracement resistance is located at $328.54 with the descending trendline A at $328.90. The 50% resistance is at $339, and a close above $340 should convince many that stocks could rise further.

Nasdag 100 Advance/Decline line still in an uptrend from June lows, line c. It reached the highest level since April and has significant resistance at line B. A drop below the WMA and a daily uptrend would be a sign that the rally has lost momentum. OBV is in a shallow uptrend as the volume is not yet impressive. The size at S$P500 was better.

So what’s the next step? Since June “Do not count on failure of the assembly” Evidence of a medium-term bottom has emerged. Last week’s action added to the “weight of evidence”.

How much pain can bears endure in the stock market? In my experience, it takes time and higher prices to convince those bearish to change their mind.

Some were not expecting the S&P 500 to beat 4000 and it may take a few more weeks and a move above the 4000 level to change their minds. It will be important to monitor the technical action of the leading growth ETFs for warning signs to see if the rally is faltering.

Last week I was looking at a pullback early in the week and then a strong close to further support the bullish case. This week I expect there will also be some profit taking as those who are not too long try to stop the rally.

Many of my favorite ETFs like QQQ and XLK
spy, IWM
and SMH
Now closer to June highs and to them star + starc. This increases the chances of a short-term pullback but at the moment there are no signs of a top.

The rises in some of the individual stocks have been more impressive, so the pullback should create stock picking opportunities. I will share my view on the market over the next week Twitter I expect stocks to rise in August as the A/D lines begin to trend higher.