Mr Market's (SP500) Emotional Swings23 Jul 2025 13:50
After consolidating following the bullish outside day on 23 June and new all-time highs, the hammer reversal on 16 July, which defied the April trend line and bounced off the key 6,200 support level, was immediately followed by the large bullish candle on 17 July. This has reignited momentum towards yesterday’s new high. The market still appears to be defying gravity, with momentum divergence on the charts being an important factor. However, the melt-up remains evident, and many frustrated bulls feel they missed the rally. Bulls are still in control, and the long-term trend from the peaks of Jan 2022 and Dec 2024 could push towards 6,475 or even 6,500, the 127% Fibonacci extension of the Feb-Apr decline, before bears might regain control.
Summary:
The S&P 500 posted a fresh record close on Tuesday, its 11th so far this year, as the melt-up in US stocks continued. The broad market rose a tiny 0.06% to close at 6,309.62, while the Dow Jones industrial average climbed 0.4% and the Nasdaq 100 fell 0.5% on a weak session for chip stocks.
Earnings season is well underway, and we face the first major test tonight with two of the Magnificent 7 reporting—Alphabet and Tesla. So far, earnings are surpassing forecasts, but this isn’t a major surprise, even if it provides a boost. Of approximately 90 S&P 500 companies that have reported so far, around 85% have exceeded expectations, according to FactSet.