2022/07/18 (051) Technical Analysis

The Price Zone More Or Less Around 30.000 Points
Was Successfully Defended By The Bulls During The Last Week…
It Remains A Relentless Price Battle This Week – With An Uncertain Outcome!

At the US WallStreet, the spotlight is this week on corporate earnings results and/or housing data. Elsewhere, the ECB, the Bank of Japan, and/or the People’s Bank of China will hold monetary policy meetings. While UK, Canada, and/or Japan release inflation figures for June. Also not to ignore are may be all flash manufacturing and services PMI figures for the US, for Germany, for France, for UK, and/or the Euro Area.

However, Let Us Get To the Point For This Week
– From A Short-Term Perspective, In The Form Of A Technical Analysis

Basically, for us bullish observers of the Dow futures, it is important to first defend the high (31,624) and/or the low (30,495) from last Friday. When US retail sales came in better than expected. And the Consumer Sentiment Index did not manifest a new historical low of below 50 points, as in May 2020. Although 51.1 points also suggest no reason to buy stocks on US WallStreet. Nevertheless, the high (31,624) and/or the low (30,495) must be defended. Since a trading range of over 1,000 points, of 1,129 points, to remain clear in detail, is extraordinary. So that we will have to wait and see whether a technical trend reversal chart formation will form at least in the short term for the coming trading days, this week and also next week.

US Stocks Face Renewed Selling Pressure

The Dow lost over 200 points on Monday, and the S&P 500 and Nasdaq closed down roughly 1% each as persistent worries about high inflation and the potential for a recession in the US overshadowed a slew of upbeat earnings results. Wall Street turned an initial rally into a selloff after Bloomberg reported that Apple intends to slow hiring and spending growth in some divisions next year to prepare for a possible economic slowdown. Even with investors scaling back prospects of an outsized interest rate hike from the Federal Reserve, now pricing on a 75 bps hike rather than a 100 bps next week, hopes for a soft landing are becoming more and more elusive given the worsened outlook for inflation. Still, some surprising positive reports from Goldman Sachs and Bank of America kept sentiment alive.

US Treasury Yields Little Changed, 75Bps Rate Hike Expected

The yield on the benchmark 10-year Treasury note was little changed at 2.9% in the third week of July, below 3% hit early in the month, as investors appear to scale back expectations the Fed will deliver a big 100bps rate hike next week. Last Friday, Fed Governor Waller and St Louis Fed Governor James Bullard said they favoured a 75 bps interest rate increase, rather than the 100 bps move. At the same time, recent economic data showed the economy remains robust, despite strong inflation and rising interest rates. Fed policymakers enter a “blackout” period this week before the FOMC meeting on July 26th and 27th. Focus this week will be on corporate earnings and housing market indicators.

Dollar Eases as Traders Reassess Rates Path

The dollar index eased further below 108 on Monday as traders reassessed the Federal Reserve’s policy tightening path and dialed back expectations for a bigger 100 basis point point rate hike that previously emboldened dollar bulls. Atlanta Fed President Raphael Bostic and St. Louis’s James Bullard signaled on Friday that they are on track to raise rates by 75 basis points for the second month in a row at the July 26-27 meeting, pushing back against speculations for a larger full percentage point increase. Investors also assessed mixed economic data, with US retail sales coming in better-than-anticipated for June, while consumer inflation expectations softened in July. Meanwhile, the dollar remains close to its highest levels in 20 years, underpinned by a relatively more aggressive US monetary tightening and safe-haven inflows spurred by global recession fears.

The Most Important Higher-Level Prizes

36832 01/05/2022 (a) previous all-time high
35752 02/22/2022 (b) 1st interim high after all-time high
35413 04/21/2022 1st interim new high above 200SMA after 3rd low above
35281 03/29/2022 (c) 2nd interim high after all-time high
33928 12/01/2021 (1) last low under 200SMA before all-time high
33434 05/31/2022 false break-out after reversal before lowest price
33031 01/24/2022 (2) 1st interim low after all-time high
32167 02/24/2022 (3) 2nd interim high after all-time high
31867 06/28/2022 1st interim new high after lowest price
31490 07/08/2022 2nd interim high after lowest price
31148 05/12/2022 1st another interim new low after (abc) (123) reversal

31047 07/18/2022 today`s close (last trading price)

30585 05/20/2022 2nd another interim new low after (abc) (123) reversal
29639 06/17/2022 lowest price so far after all-time high

For All Our Love Of Technical Analysis,
Don`t Underestimate Fundamental New Numbers From The US Economy
– And/Or Much More The Reaction Of The FED, In Form Of Interest Rate Hikes

Regardless of the current technical picture, new data from the US economy must also be taken into account. Because the FED cannot avoid a hawkish monetary policy in order to suppress US inflation. And that even if you are not held responsible if we continue to argue competently. Since Sleepy Joe Biden, since he has been in charge of the White House Office, has reversed the policies of his predecessor Donald J. Trump. That the US consumers are now paying for. And also the FED, with above-average interest rate increases. Including the danger of conjuring up a US recession as a result.