Weekly Market Review & Analysis For July 19, 2021   

The S&P 500 market with respectful +2.0%, DJI Average with +1.1%, and Nasdaq Composite with +2.8% finished the week at new record highs, as investors and traders welcomed a BTD (buy-the-dip) mindset and loaded into the most significant stocks in the market after a bumpy beginning to the week. The leading indices, including the small-cap Russell 2000 posting +2.2%, increased between 1 to 3%.  

On Monday's session, the S&P 500 plunged below our Mean Sup $4,290 and buy zone box ($4,320-$4,290), and the Russell 2000 index penetrated the correction area, which by the standard definition is measured by a 10% decline from a latest high, reportedly because the stock market was troubled about the latest Delta variant quieting down economic growth - how about initiate take-down to weed out weak longs!

All significant indices declined between 1 to 2% that day; however, the silver lining was that the broad S&P 500 index strongly retested its slower time frame support levels (i.e., 45 min chart). Subsequently, the benchmark index clinched a higher closing price for the remainder of the week, widely attributed to the following circumstances:

  • Expectancy that the mega-caps equities will produce strong earnings releases next week after a hefty slate of solid earnings numbers this week. For example, the Vanguard Mega Cap ETF climbed 3.1% this week.
  • Price momentum force and a FOMO (fear of missing out) on further gains.
  • Nine sectors of the 11 S&P 500 index market settled higher, driven by the communication services sector with +3.2%, consumer discretionary with +2.9%, information technology with +2.2%, and health care with +2.2% were the sectors with gains above 2.0%. The energy sector posted -0.4%, and the utilities print of -0.9% were lone sectors finishing lower.

On the bond market frontline, the Ten-year yield declined one basis point to close at 1.29%, although it slipped below 1.14% early in the session this week.

Market action elsewhere

In the overseas trading market, the major Eurozone markets all advanced notably higher on Friday. While the United Kingdom.'s FTSE 100 Index improved by 0.9%, the German DAX Index surged by 1%, and the French CAC 40 Index rose by 1.4%

Meanwhile, the stock markets across the Asia-Pacific zone delivered a mixed performance on Friday's session, with the Japanese stock market closed for a Sports Day holiday weekend. Mainland China's Shanghai Composite Index declined by 0.7%, while Australia's S&P/ASX 200 Index crept up by a small 0.1% gain.

The emerging stock markets (EM) outperformed with the cloud evaporating from the broken American IPO of Chinese firm Didi - ride-hailing (customized ride) once the broader fundamental picture took center stage, as Chinese economic numbers thunderstruck to the up-side. 

The EM's were also catching up to the easing bank reserve ratio cut movement by the PBOC (People’s Bank of China) in the prior week. The People’s Bank of China's move is significant as it gestures that China's monetary policy is ready to be flexible and responsive.

Impact of the ₿ word

The highly awaited virtual Bitcoin conference was held last Wednesday. The open discussion was between Elon Musk, Jack Dorsey, and Cathie Wood. 

Each person brought his their perspective. Dorsey understands the Bitcoin ethos, the internet, and the potential impact on developing nations from Bitcoin. Wood has a great understanding of the institutional investment world. Musk is much more focused on the technical part of the network. 

Bitcoin is 12 years old. It's incredible to see the world's most prominent entrepreneurs discussing Bitcoin with hundreds of thousands of viewers watching live. Jack Dorsey stated that Bitcoin could usher in world peace, and he might be right. If we fix the fiat money, we have a chance to improve the world.

Caught the Tuesday dip? As stated in Weekly Market Review & Analysis For July 12, 2021: Are you looking for a discount if Bitcoin dives to retest our Completed Outer Coin Dip of $29,456? Is this the perfect moment to buy the dip?

Yes, indeed, this was the place to get long and advancement to our current intermediate target of $34,535, adjusted Mean Res $35,980, and designated on June 21, Mean Res $40,450.

BTW, this could commence a primary market run into tangible cryptocurrencies assets such as Bitcoin and include Gold and Silver. Is this why JP Morgan is the leading big to fail bank (with others to follow) placing high-net-worth customers into cryptos? - Stay tuned and be prosperous.

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