As per my July 2020 newsletter, unless the market clears 3,180 and then 3,225 the market is trapped by Island Reversal Pattern of early June.
It will clear it,there could be even a nice correction with a backstop at 2,925/2,960 but it takes a bit of time.
Why so sure?
There is too much stimulus in the market and too much cash on the sidelines.
All the “working metals” have recovered a lot and even the shipping (Dry Baltic) shipping rates went up 250% in June.
The earning season sentiment in the US is very low. Factset’s Earning Insights shows that SP500 earnings are expected to decline 44% and Bottom-up estimates fell 37% over the quarter – a lot worse than the average and it all happened in April when the market was stopped – so a quite easy beat as June the sentiment recovered a lot, economic surprises are at 2 years high and USD weakening.
investorpolitico 