To The Moon

The $S&P 500(.SPX)$ ’s coming retracement will be limited, while the $NASDAQ(.IXIC)$ ‘s trend may be more fiercely , and the $DJIA(.DJI)$ components will be a safe haven?

Key points: With the blessing of $Apple(AAPL)$ new Iphone 15 going to launch in september, the $SP Plus(SP)$ $S&P 500(.SPX)$ may not retreat to 4,000 point, otherwise we have not yet broken out of the bear market. The $NASDAQ(.IXIC)$ 's heavyweight tech stocks have risen too much, and need to be adjusted and repaired in the mid-term trend to get closer to the half-year or full year moving average point ( which is above 12,000 points). The $DJIA(.DJI)$ may get out of the turbulent Darvas Box and become a defensive safe haven for H2 2023.

In this article, I used Fibonacci retracement tool and key high weighted stocks of each index to give my forecast besides market experts. Welcome Tigers read to the bottom to get some common sense on potential sectors and industry strategies.

Special Notes: All my personal points are not for trading directly, investing carries risk. Please be scientifically on your holdings,portfolios, and protect strategies. If you like my article, please comment and share.

On Thursday, the $S&P 500(.SPX)$ , $NASDAQ(.IXIC)$ , and $DJIA(.DJI)$ collectively fell. The main reason is that the ADP data greatly exceeded expectations, and the market expects the Fed to raise interest rates twice in the next 6 months.

At present, the market's anxiety about the short-term Topping process of US stocks has increased. $Cboe Volatility Index(VIX)$ , $VIX Short-Term Futures 1.5X ETF(UVXY)$ soared.

1.What kind of correction or how dip will the three major U.S. stock indexes have?

First, let's take a closer look on the $S&P 500(.SPX)$ , it fell on Thursday to fill the gap formed by the jump on last Friday, but closed up with a “BULLISH HAMMER CANDLESTICK”, same as $NASDAQ(.IXIC)$ and $DJIA(.DJI)$ It is still closed between the 5-day and 10-day moving averages.

Data as of July 6th

BULLISH HAMMER CANDLESTICK

Judging from the below 60 mins K-chart, Topping on the way, right?

60 mins K-chart, data as of July 6th

So far this week, only defensive sectors like utilities ( $Utilities Select Sector SPDR Fund(XLU)$ ) and staples $Consumer Staples Select Sector SPDR Fund(XLP)$ ) are green. Meanwhile, cyclicals, value and growth -- just about everything else -- are tumbling.

Looking into a basket of sentiment ETFs, alternative energy ( $Invesco Solar ETF(TAN)$ ), crypto ( $ProShares Bitcoin Strategy ETF(BITO)$ ), gambling ( $Roundhill Sports Betting & iGaming ETF(BETZ)$ ), homebuilders ( $SPDR S&P Homebuilders ETF(XHB)$ ) and chip stocks ( $iShares Semiconductor ETF(SOXX)$ ) are all down 3% or more. In that group, only cannabis ( $ETFMG Alternative Harvest ETF(MJ)$ ) is green, which happens to be the second-worst performer of the year, next to regional banks ( $Financial Select Sector SPDR Fund(XLF)$ ).

2. My personal Understanding on $S&P 500(.SPX)$ , $NASDAQ(.IXIC)$ , $SPDR S&P 500 ETF Trust(SPY)$

Use Fibonacci retracement to judge the support and resilience, we can see that once a realative big retracetment happens, the first support would above 4200 area.

Fibonacci retracements are popular tools that traders can use to draw support lines, identify resistance levels, place stop-loss orders, and set target prices.

Data as of July 6th

In technical analysis, a Fibonacci retracement is created by taking two extreme points (usually a peak and a trough) on a stock chart and dividing the vertical distance by the key Fibonacci ratios of 23.6%, 38.2%, 50%, 61.8%, and 100%.

In addition to the top weighted stock $Apple(AAPL)$, this company going to launch new product of Iphone 15 on Autumn, i don't think the market will fall to 4000 are. Which means $Apple(AAPL)$ need to fell to $150 around. Based on the views of 39 analysts counted by tiger Trade, for the next 12 months, the average target price of Apple is $188.47.

Data as of July 6th

When it comes to the $NASDAQ(.IXIC)$ , a pullback could be even more sinister. After it peaked on the 16th recently, the drop on several day's K candlestick seems long. It's now standing on the the 20-day EMA (purple line).

However, the dispersion of the different range's moving average line is large, and the semi-annual DMA (green line), and the annual moving average (blue line) is far away from the current point.

The follow-up trend may require more time or fluctuations to run to a healthy state？and the soared technology stocks especially semiconductor industry stock such as $NVIDIA Corp(NVDA)$ , etc., are key focused on the impact on the volatility of the $NASDAQ(.IXIC)$ in future.

Data as of July 6th

In the year of 2023, the $DJIA(.DJI)$ is more likely traing inside a box, see as below.

Data as of July 6th

With a YTD rate of 2.34%，looking at the top 10 YTD components，except for the four AI beneficiary stocks $Salesforce.com(CRM)$ $Microsoft(MSFT)$ $Intel(INTC)$ , the other 6 stocks $American Express(AXP)$ $Visa(V)$ $McDonald's(MCD)$ $Boeing(BA)$ $Wal-Mart(WMT)$ $Cisco(CSCO)$ just have an average gains lower than spx‘s current yearly gains.

Regarding the expectations for the second half of 2023, or in the upcoming market pullback, I‘m more willing to finding opportunities in some defensive industries such industrial, consumer goods, and medical & healthcare，even some tech stocks that have a demand for supplementary growth.

Fot next week ,we are welcoming the Q2 earnings results to see the finance sector’s performance.

Do you agree too?

3. Special Adding for $S&P 500(.SPX)$

Trader and Financial markets analyst Monica Kingsley shared on this web: the market is marking the onset of topping process giving way to lengthy decline over the summer and into September bottom. I believe the importance of 4,500 – 4,510s area as a key resistance and potential top.

Elliott Wave Forecast Team expressed S&P 500 (SPX) looking for short term pullback from wave theory analysis:

Short term Elliott Wave view in S&P 500 (SPX) suggests that pullback in wave ((iv)) is in progress to correct cycle from 5.4.2023 low in 3, 7, or 11 swing. Down from wave ((iii)), wave (a) ended at 4385.05. Expect wave (b) rally to fail below 4458.48 and the Index to turn lower in wave (c) before it completes wave ((iv)) and resumes higher.

Wave ((iv)) typically ends somewhere at the 23.6 – 38.2% Fibonacci retracement of wave ((iii)). That area is at 4301.2 – 4361.1. From here, the Index can find buyers for further upside. Near term, as far as pivot at 4046.07 low stays intact, expect pullback to find support in 3, 7, or 11 swing for further upside.

Assuming that US stocks will lead to a correction, are you ready?

In this circumstance, we may encourage to consider adding some put options, inverse ETFs, or sell your expecting bearish targets to hedge or protect you profit or portfolio.