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06/21/2024 |

Market Update Into June 24th: Time To Take A Dip?

It was another hot week in the markets, but with Summer kicking into full gear, is it time for stocks to jump in the pool and cool off? With key players like NVDA flashing signs of a reversal and seasonality suggesting the potential for more weakness next week, it seems like now is as good a time as any for a short breather. In other news;

Despite the possibility of a continuation lower next week, don’t get your floaties in a bunch! It’s an election year which means stocks should perform well through the summer. Let’s dive into the charts.

Weekly Analysis

SPY (SPDR S&P 500)

The SPY ETF made little headway this week, giving back much of its early-week gains and closing at $544.51 (+0.32%). Cautious traders are pointing to a clear overextension away from the 200-day SMA and an overbought RSI reading as reasons to tread lightly. In fact, the last time this index was this far above its 200-day SMA was in May of 2021!

This is a daily chart of the SPY index.

QQQ (Invesco QQQ Trust)

This week, the QQQ ETF made history, with a daily close above an 80 RSI level for only the 13th time ever. Despite this strength, the week ended on a down note, closing at $480.18 (+0.19%). This index has been running hot and is currently farther away from its 200-day moving average than it’s been in nearly a year, suggesting the possibility for some cooling in the weeks to come.

This is a daily chart of the QQQ index.

IWM (iShares Russell 2000)

It’s hard to believe, but the small caps were the top gainer this week, closing at $200.35 (+0.82%). That said, is history about to repeat itself? In August of last year, a clear head and shoulders pattern led the way to a break below the 100-day SMA, and a very similar-looking setup appears to be forming now.

This is a daily chart of the IWM index.

Earnings

This is a chart of all the most important earnings announcements this week.

Notable Results

ACB (Aurora Cannabis)

  • EPS: $(0.30)  vs  $(0.17) est 
  • SALES: $67.41M  vs  $70.48M est

KR (Kroger)

  • EPS: $1.43  vs  $1.34 est
  • SALES: $45.27B  vs  $45.04B est

ACN (Accenture)

  • EPS: $3.13  vs  $3.15 est
  • SALES: $16.47B  vs  $16.55B est

LEN (Lennar Corporation)

  • EPS: $3.38  vs  $3.24 est
  • SALES: $8.77B  vs  $8.25B est

DRI (Darden Restaurants)

  • EPS: $2.65  vs  $2.62 est
  • SALES: $2.96B  vs  $2.98B est

KMX (CarMax)

  • EPS: $0.97  vs  $0.94 est
  • SALES: $7.11B  vs  $7.21B est

LZB (La-Z-Boy Inc)

  • EPS: $0.95  vs  $0.70 est
  • SALES: $553.53  vs  $516.44M est

WGO (Winnebago Industries)

  • EPS: $1.13  vs  $1.34 est
  • SALES: $786.00M  vs  $799.85M est

What’s Happening Now

SPY (S&P 500)

Is it time for a short commercial break? History supports a pullback on the SPY as momentum begins to slow. Last week’s mean return & this week’s win rate are among the lowest over the past two decades but typically precede a resurgence in July.

This is an image of SPY's weekly seasonality chart.

XLK (SPDR Technology Fund)

Tech summer time. XLK boasts a dominant 84% win rate with a 20-year average return of 3.8% in July. With SPY seasonality pausing to coil, pullbacks on tech leaders can be seen as ‘the calm before the storm’ until proven otherwise.

This is a monthly seasonality chart of the XLK ETF.

DELL (Dell Technologies)

DELL and SMCI stocks rose after Elon Musk announced his AI startup, xAI, would use their servers to build an ‘AI Factory’ after redirecting Nvidia GPUs from Tesla to xAI. Meanwhile, Dell’s founder, Michael Dell, has sold $2.1 billion in stock this year, citing an increased ownership percentage due to a reduced share count. He currently owns ~58.9% of the company.

This is an image of recent DELL insider transactions.

Believe it or not, this is just a fraction of what happened in the markets this week. For a full run down delivered straight to your inbox every weekend, sign up for The Official TrendSpider Newsletter.