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Highlights...
1. The S&P 500 index (a.k.a., the broader market) grew at a spectacular rate of 5.5% in July 2020, defying the on-going massive resurgence of the pandemic outbreak in the Sunbelt.
2. Today (7/31), the index closed at 3,271, just 122 points below the all-time high of 3,393 set on February 10, 2020. Considering that the recent trend has been a linear, the index is expected to eclipse the prior high sometime next week.
3. Though the trading volume in July (4.325B) has been slightly lighter than the YTD average (5.257B), it is by no means very thin. The lighter volume in July generally results from the 4th of July vacation stint.
4. The 49% reversal thus far since the March 23 low of 2,192 is simply awe-inspiring. The fact that the volatility index (VIX) is still at 24.46 -- far above the 52-week low of 11.42 -- perhaps indicates that the market is not overbought yet, meaning it has quite a bit of room on the upside.
5. The trend will remain bullish if it breaks out of the congestion between 3,275 and 3,300. Likewise, it has developed firm support around 3,150, breaching which, it may quickly fall into a short-term correction.
-Sid Som
homequant@gmail.com
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