INDICES MARKET OUTLOOK – 19 JULY 2021

The Dow Jones, NASDAQ and S&P500 all closed the week out negatively at -0.58%, -0.97% and -0.99% respectively. With Jerome Powell and Inflation talk taking the spotlight last week, investors will be eyeing financial statements as earnings season is once again upon us.

Last week saw a lot of risk events with Jerome Powell’s speech at Capitol Hill taking the spotlight. The Fed Chairman used his two days to explain why the Fed will be retaining its dovish outlook. This in turn sent Yields lower as investors flocked to safety in the form of Treasury Bonds. At the time of writing, the 10 Year Yield curve is below 1.3%. Should we see continued downside on the curve, this could be the catalyst to send stocks even higher.

10 YEAR TREASURY YIELD CURVE DAILY TIMEFRAME

The current theme within the market for the weeks ahead will be earnings season. This week sees the likes of Twitter, IBM, Netflix and Intel reporting which could definitely bring some volume and volatility to NASDAQ.

This week sees the economic docket for the US slow down slightly as we have Crude Oil Inventories on Wednesday. Investors will be eyeing this in light of the recent OPEC meetings which took place as well as the Delta variant weighing on market mood. Thursday also brings Initial Jobless Claims to print as we continually try to gauge the employment rate in the US.

FUNDAMENTALS FOR THE WEEK AHEAD
EARNINGS CALENDAR

Technically, we have seen some bearish momentum for the first time in a while on NASDAQ which is perfectly normal in the bigger picture. Last week saw price printing a form of an evening star at All Time Highs before last week Friday continued that momentum and broke the ascending trendline. Price is currently falling into our deepest Fib retracement levels which could provide decent risk to reward setups. Should price break below the $14 550 handle, this would invalidate longs for the time being and would look to see what happens around the psychological level of $14 500.

NASDAQ DAILY TIMEFRAME

After taking a beating last week, the Dow has found a form of support around the psychological level of $34 500. Price is slowly approaching the ascending trendline which could provide a form of dynamic support sending price higher. If not, we have the Fib retracement levels in line with previous support to look for potential long positions. Once again, a break below the 100% Fib level would invalidate my long bias with $34 000 being the next area of interest.

DOW JONES 4 HOUR TIMEFRAME

As always traders, exercise healthy risk management and we hope you have a fantastic trading week ahead. For more updates like the one above, subscribe to our blog for instant updates to your mail or join our Telegram Trading Floor via our website at http://www.aspirefx.co.za.

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