SPY Technical Analysis & Market Update for July 2023


Chart done on hourly timeframe. Markets charged higher last week after multiple economic and earnings reports came in better than expected, boosting investor confidence. The latest CPI and PPI reports showed inflation is now down to the 3% mark, a significant MoM improvement and closer to The Fed’s target rate of 2%. U.S. consumer sentiment also jumped close to a two year high according to Friday’s Consumer Confidence Index. So good news all around last week for the market, but this week we’re getting deeper into earnings season, companies like Tesla, Netflix, United Airlines, and much more will be reporting their numbers. Along with critical earnings, the market is also expecting The U.S. Census Bureau to issue retail sales data for June. 

Technical analysis:

Although markets shifted to the downside on Friday, most stocks were still able to close in a bullish trend and in “cushioned” ranges. Buyer confidence is very high right now, tapping into extreme greed on some fear & greed indexes. This means that strong unexpected downturns and shakeouts could become a more normal occurrence at these levels, just like we saw on Friday. As we head into key earnings this week, SPY may need to pull back further through the uncertainty, below Friday’s lows it can slowly decline to retest the 445.00 breakout support. Buyers will need to defend the support to maintain the strong bullish range. If markets can push higher, SPY needs a move above 451.36 to see its next price targets of 453.00 and 458.00.