Monthly Market Movements For July 2021 #djia #ndx #spy

I have decided to bring forward my monthly market movements analysis for July 2021 by 1 week due to some interesting signs i’m seeing by Mr Market.

First off, I’m seeing equities lagging behind gold in the short-term and mid-term. At the moment I’m leaning towards bear case for equities against gold overall. Now is a good time to start going into gold as an inflation hedge play. Long term wise , I am starting to lean towards bear case for equities as the wedge I spoke earlier is too early to call out in hindsight. The trend is still downwards long term wise.

Equities are also starting to look bearish towards US Bond Yields short term. This indicates Market is pricing in an increase in the US Dollar 10 Year interest rates

When analyzing the three major US Indices,

Mid term wise ,

its interesting to note that DJI is already going through a sell off of 4%.

Until this point, the trend is still upwards.

However, if the 20 EMA crosses over the 50 EMA line and both point downwards,

I will be looking at whether DJI can hold above 33290. if it doesn’t and breaks past 33290, I will be looking at the bear case that DJI may experience a correction of 11% to 20%

The jury is still out for Nasdaq . Do note that It has already hit its all-time high point of 14000! The overall trend is still upwards. I will be monitoring the bull case that it can break out of 14000 and trend further up. The bear case would be that it is unable to maintain its momentum and rebounds down from 14000.

Similarly to Nasdaq, the jury is still out for S&P 500. Overall trend is still upwards.

In conclusion, for the month of July

I will paying attention to DJI as it is exhibiting mid term wise of a potential correction. However NASDAQ and S&P 500 also warrants close monitoring as they are already both over-extended.

Again, consistent with my earlier message would be

  1. start building your war-chest (i.e. accumulate cash)
  2. rebalance your portfolio particularly those too exposed to bubble stocks/growth stocks
  3. look into diversification into value stocks / gold as hedge against inflation play.

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