Wrapping with July

and it looks like the stock market is still in favor of the Bulls.  If only so slightly.  There were many in the media who were ominous about a coming correction after the second-quarter gain in the S&P 500.  For this month alone, the S&P 500, Nasdaq Composite and Russell 200 gained over 4 percent.  The Dow Jones also saw gains of over 2 percent.  Several key points came in this week.

One of the busiest week for earnings, GDP economic data fallout, and the Fed meeting.

The Feds meeting this week was pretty uneventful and in the near-term ensure that liquidity is still in play.  GDP data came out and to no ones surprise it was pretty dreadful.  And as discussed in our earlier blogs regarding July's estimates, we expected a "better" earnings report for the month of July.  Due to COVID-19 and the economy shut down, analysts had low-ball earning estimates for most companies.  Most earning results thus far are ahead of analysts' estimates.

Market Daily Report

Overall, this week has been uneventful for the market.  The consolidation continues.  If nothing else, the week prior saw a breakout to the upside.  Since then, the trading range continues.  However, the weekly trend reading for the major indices are still in an up-trend.  The daily trend is leaning toward bullish again.

SPY rallied strongly at the close of Friday (due to Apple earnings and split) but for the majority of the week, it traded on an average of 5 points.

QQQ had a better week.  Thanks to Apple and strong sector earnings, the tech sector was the best performer for the week.  That cannot be said for the energy sector.  USO ETF had a down week.

Small-caps (IWM) last Friday dropped through key support but rallied late into the close.  IWM has traded through narrow support and resistance.  For more than 2 weeks, it has traded in an average range of 5 points.

Wrap up

The current consolidation can be seen by some as just sector rotation and rebuilding before the next move higher or that the rally is on its last leg and will ultimately succumb to a correction.  Overall, if we look at July, most major indices finished in positive territory.  Even with COVID-19 cases rising in the United States, the S&P 500 is now in the green for 2020.  As discussed in our prior blogs about earnings season, "strong" earnings has helped propelled the market higher.

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