Seasonal Context & Events

Unfortunately, due to personal commitments, the articles for July 11th and 18th won’t be published. I’ll be back on the 25th—see you then!

We’re officially back in earnings season territory, so brace yourself for the usual round of surprises, overreactions, and analyst facepalms. Aside from that, it’s a pretty standard setup—no holidays to disrupt the flow, no options expirations to skew things, and none of those end-of-month inflows or outflows that tend to throw a wrench into the price action. Basically, it’s just the Market and its earnings-driven mood swings this week.

Key events include:

• 09th July 18:00UTC FOMC Minutes
• 10th July 12:30UTC Initial Jobless Claims
• Those events may or may not influence the opening direction and subsequent days.

The Trading Week Recap

Before the break—believe me, I’d rather be writing these articles than dealing with what’s actually on my plate—let’s at least leave on a technical note.

Let’s talk about something you might’ve heard of: the good old “Dow Theory.”

Dow Theory is like the granddaddy of technical analysis—it’s old, but still quietly running the show behind the scenes. At its core? Simple logic: the trend is your friend… until it smacks you in the face. Charles Dow figured that for a market move to be legit, both the industrials and the transportation sectors had to agree. Back then it was railroads; now we call it the Dow Jones Transportation Average. Same concept, updated vehicles.

Here’s the cheat sheet version:

1. Trends come in threes: primary (the big one), secondary (the bouncer), and minor (the jittery one).
2. Confirmation is key: Industrials and Transport must both make higher highs (or lower lows) to validate a trend.
3. Volume is the hype man: more volume, more credibility behind the move.
4. A trend stays in motion until proven otherwise—don’t call a reversal too early.
5. Closing time matters: daily closes carry the weight, not the lunchtime wiggles.

In plain English: If only one side’s moving, don’t trust it. Real trends come with company. And when both lines sing the same tune—with volume backing the beat—that’s when you pay attention. Dow Theory doesn’t promise precision; it promises context. And context is what keeps you from buying tops and panic-selling bottoms.

A few months back, I found myself staring at the charts and wondering, “What happens to the S&P 500 over the next 5 to 10 days when the NASDAQ and the Dow close with opposite signs?” One green, one red—like they’re not even in the same room. You know the deal: NASDAQ is your tech playground, while the Dow’s got steel, grease, and whatever industrial muscle is left. I started treating this mismatch as a possible divergence signal—something that might whisper, “Hey, something’s off here.”

Now, I wasn’t trying to solve all of Market’s mysteries—just poking around. I wanted to see if this oddity said anything useful: Does it mark a trend change? Does it show up at the end of a run or smack in the middle? And why does it happen in the first place?

I’ll save the philosophical answers for another time. What I will share is what I found when looking at the S&P 500 in the short term—what typically happens in the next 0 to 5 days, and then in the 5 to 10 days that follow. The rest? Well, if you’re curious, there’s a rabbit hole waiting for you.

So, what actually happens when the NASDAQ and the Dow decide to part ways for the day? Spoiler: in the short run, not much. The S&P 500, that great democratic index of market sentiment, doesn’t really pick a side in the first few days. It kind of shrugs. Flat returns, direction all over the place, and frankly nothing meaningful to hang your hat on. But if you extend your view out a bit—say, into the second week—you start to see a soft upward drift. Nothing crazy, just a gentle nudge higher, like the Market’s quietly making up its mind. And here’s where it gets a bit more telling: when it’s the NASDAQ that’s green and the Dow that’s dragging, the S&P tends to perform better. The tech optimism seems to carry more weight, giving the S&P a more consistent lift over the next 10 days. Flip it around—Dow up, NASDAQ down—and the pattern loses its rhythm, more noise than signal. In short: not all divergences are created equal, and when the future leans tech, the S&P tends to lean with it.

So why am I dragging this out now? Simple. We’ve had a nice little run since the 23rd, and forecasts were already calling for a breather this past week—which we got. Then, on July 1st, we had a juicy divergence: Dow in the green, NASDAQ not so much. And with next week looking like it could kick back into gear—especially with the July DOIs hinting at some action as early as the 7th—it felt like the perfect moment to dust off this signal and see if it actually does something… or just takes up another line in the spreadsheet.

What happened last week? Forecasts were expecting the Market to hang out somewhere between R1 and R2—but on the final day, it decided to flex a little and punched through R2, wrapping things up near R3. Close enough for government work.

Support & Resistance Levels

R3	6393
R2	6347
R1	6314
Close	6279
S1	6105
S2	6085
S3	6017

Forecasts

I’m keeping it brief for the next two weeks—not because I’m vanishing (well, I will be, but that’s another story), but because the end-of-month and end-of-quarter forecasts are already packed below. So here’s the short-term view: I expect the Market to rise into the 11th, with that upward move potentially sticking around until the 15th. Around that point, I’m eyeing a pullback that could stretch into the 23rd. Then we may see a bumpy climb from the 24th to the 28th, followed by a more decisive move upward to close out the month.

After that? Expect August to be a slow, choppy drift downward—nothing too exciting, which frankly suits me just fine. No need to force trades in the Market’s summer autopilot mode. For now, I’m placing the potential high of the month somewhere between the 11th and 15th.

End of Month

June’s DOIs: 05th, 10th, 23rd, 27th.

The blue lines mark the DOI dates mentioned above. Just a reminder—DOIs (Dates of Interest) are when I expect a potential shift in the Market’s direction. Now, let’s take a quick look at how that played out last month:

On the 5th, we got a red candle—but the 6th quickly flipped the tone, with the Market confirming its intention to climb. Not my favorite setup. The 10th brought a slow, choppy drift lower, and sure enough, the uptrend resumed on the 23rd. From the 27th onward, the Market basically went sideways.

All in all? Aside from the 5th, I was pretty happy with that map.

End of Quarter

This will be the last forecast for end of year target and behaviour. I will paste in here the original analysis made in January 2025.

From a longer-term (year-ly) perspective, the so-called “2025 apocalypse” was a popular call—guilty as charged. However, this is likely to mark the bottom for the entire year. Some corrections are expected around the first two weeks of March (around 200 points, give or take), which could present another solid ‘buy-and-hold’ opportunity. Beyond that, the Market is expected to rise until around mid-July, where a sideways-to-down phase (less than 200 points) might take over, lasting until the final days of August. From there, a rise into September could follow, pausing in the middle of the month before a small correction to close out September. October? Likely another leg up, pushing into mid-November, after which the Market may shift into its classic “I have no idea what to do in December” mode. That mess might just recover during the last two weeks of December because, well, that’s how markets like to end the year—full of surprises.

Don’t plan on changing my outlook for how the Market behaves—I still expect it to follow that same general pattern. Now, about the target: originally it was 7200 by year-end, and I left it there in March. This will be the final adjustment. As much as I’d love to keep 7200 alive, realistically, it doesn’t look like it’s in the cards anymore. So I’m dialing it back to 6800 by 31/12/2025.