Stock Market Analysis: Time For Change?

July 2, 2021

We are now moving into the second half of the year where it becomes a great time to re-evaluate how your trading is doing. If your first half of the year was fantastic, take some time to consider what you did to make it so good. If it was not so good, then take some time to figure out what you may want to change. This might take some time for you to review so be prepared to set aside the necessary time to adequately review your trading.

The big news for the week was surrounding how the employment situation is doing. On Thursday we saw the Unemployment Claims number come out at 364K which was better than the forecast of 388K claims. This shows us the number of individuals who filed for unemployment insurance for the first time this last week. This is a good sign when we see fewer individuals looking for insurance. On Friday we had the Non-Farm Employment Change which also came in better than the forecast of 725K. The overall change came in at 850K, but we saw the unemployment rate rise instead of going down like was forecasted. The expectation was that the unemployment rate would drop to 5.6% but came in at 5.9%.

We also saw the Pending Home Sales number come in on Wednesday. This number was forecasted to be -1.1% but came in at 8.0%. This number shows the number of homes under contract but still waiting to be closed. It seems like this number represents the strong housing market we are seeing around the country right now.

This next week we will see some additional inflationary numbers as well as the last minutes from the FOMC meeting. Continue to look for news to move the markets as volatility continues to be in play.

Today we are going to look at the daily chart of the SP-500:

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8 of the last 10 trading sessions were bullish trading days and many of those moved the SP-500 into new all-time highs. We know that the market will cycle and move up and then move down. The length of those moves will determine if the trend is moving up or down. With this entire chart you can see the lengths of the up moves are significantly higher than the down moves. We are certainly in a situation where we are making higher highs and higher lows. While many traders are thinking that this should come to an end soon, the fact is we have yet to see any evidence that it is beginning to slow. In fact, every time it looks like we may see a move down the market jumps right back up.

This bullish movement into new record highs does not stop with just the SP-500 but we have seen the same with the NASDAQ and the DJ-30. A good lesson to take from this is that we need to trade what we see happening on the charts and not try to outsmart and out-think what it should do. Make sure you keep your risk at appropriate levels and continue to monitor the market for signs of weakness. The markets will be closed on Monday for the Independence Day holiday in the US.

Bill Poulos is an investor, financial educator, and retired automotive executive. In 1974, he began to follow the stock market and invest as a hobby. Departing from GM in 2001, Poulos employed his trading experience to co-found Profits Run with his son Greg. A financial publishing company, Profits Run, Inc. strives to teach regular folks safer trading techniques with a mind towards risk management. Profits Run utilizes such programs as Earnings Profit Alert, 20/30 Wealth Trader, Premium Income Alert, Crypto Profit Alert, Instant Options Income, Real Wealth Alert, Rapid Income Engine, Forex Profit Accelerator 2.0, Premium Income Letter, Profits Run Coaching, and Profits Run Alliance. Bill lives with his wife, Karen of more than 50 years in Michigan, where Profits Run is located. They have three adult sons and two grandchildren.

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Profits Run, Inc.

Profits Run offers coaching, 20/30 Wealth Trader, Earnings Profit Alert, Rapid Income Engine, Premium Income Alert, Premium Income Letter & Real Wealth Alert.