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Stock Market Outlook
For The Week Of June 25th = Uptrend


    ADX Directional Indicators: Uptrend
    Price & Volume Action: Uptrend
    Elliott Wave Analysis: Downtrend


The stock market outlook maintains an uptrend to start the final trading week of June.

The S&P500 ($SPX) fell 1.4% last week, but remains elevated from the 50 and 200 day moving averages (~3.5% and ~8%, respectively).

Technical analysis of daily SPX prices

2023-06-25-SPX Trendline Analysis - Daily

No change in signal for the ADX or price/volume. Rebalancing of the Russell 2000 skewed trading volumes to the upside on Friday, although price was almost unchanged.

Elliott Wave moves from mixed to downtrend. The MACD cross-over marks the end of the current wave structure for both bullish and bearish counts.

Technical analysis of daily prices

2023-06-25- SPX Elliott Wave Analysis - Daily - Primary Y (Bearish)

This signal does NOT mean the market won't rally from here. It's entirely possible the SPX bounces back towards the June 16 high this week, much like the late November 2022 and mid-February 2023 rallies after the MACD began a bearish cross-over.

Technical analysis of daily prices

2023-06-25- SPX Elliott Wave Analysis - Daily - Primary 1 (Bullish)


A rate hike from the UK central bank surprised most market participants, during an otherwise light week of economic data releases.

The S&P500 completed earnings season: Revenue grew 4.2%, profits fell 3.6%.  Those figures don't sound too bad, until you look at the sector break-down and see the relatively large range of performance.

S&P500 Q1 2023 Earnings

Source: Hedgeye Risk Management via Bloomberg

Regardless of how many times company executives mention "AI" and/or artificial intelligence, underlying economic data doesn't support a widespread earnings turnaround next quarter; reporting begins in 3 weeks.

Monday's opening price action will be influenced by Russia's internal conflict, which took center-stage during the weekend. We get durable goods/orders, consumer confidence, and home sales on Tuesday morning.

PCE Core Inflation (y/y)

Source: TD Ameritrade via Briefing.com

The Fed's preferred inflation gauge, Personal Consumption Expenditure (PCE), drops on Friday. The data probably shows inflation remaining high, but not as high as last month or last year, which still supports the U.S. Fed's "higher for longer" stance on interest rates.

The coming week not only marks the end of June, but also the end of the second quarter. Will equities get a month-end mark up as investors fear missing out on the June rally? Or will market participants unload their winners ahead of the summer trading lull? Maybe a bit of both...why don't consider the same for yourself?

Best to Your Week!

P.S. If you find this research helpful, please tell a friend.
If you don't, tell an enemy.

Sources: Bloomberg, CNBC, Federal Reserve Bank of St. Louis, Hedgeye, U.S. Bureau of Economic Analysis, U.S. Bureau of Labor Statistics

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