SPY Weekly Technical Analysis and Market Update for July 2023




Chart done on hourly timeframe. Earnings season kicks off this week with companies from various sectors reporting their last quarter performance. Financial institutions will be the first to report their earnings along with a few names in travel like Delta, and consumer defensive companies like PepsiCo. The various companies reporting this week will give us an idea of  where consumers are actively spent their money last quarter, potentially foreshadowing what we could expect from other companies in those same industries when their earnings are released. Many stocks outpaced expectations last quarter, their earnings will show if valuations match their performance. 


If earnings aren’t enough action for you, inflation data will surely bring some movement. The CPI and PPI reports are expected this week, updating markets on the latest inflation readings. Inflation has been cooling down steadily since The Fed’s action to hike interest rates, investors will want to see the same trend to feel more confident in buying. Last week’s labor market data raised the chances of The Fed’s raising rates in their next meeting from 36% to 46%, if inflation moves higher, those chances will skyrocket. 


To cap off the week on Friday, the preliminary reading of the Consumer Sentiment Index will be released. This index, which measures consumer confidence, rose 9% in June; the strongest one month gain since January 2023. 


Technical analysis:

Friday looked strong for markets until the finally hour of trading wiped out the rally and sent names across the board back down. SPY’s next support in focus is 437.05, below that point the downside price targets are 434.00 and 431.15. Bulls are still fighting to get their 444.30 breakout to continue the year’s rally, but the week ahead is filled with reports that can send markets in either direction, so approach carefully.