Toward the end of June we primed you for NASDAQ’s 12-day Midyear Rally, what we like to call a little Christmas in July for the market.
Two days later we reminded you that this NASDAQ (NYSEARCA:QQQ)Christmas in July rally was looking for support at the June 25 close of 7885, which remains just a hair above the 50-day moving average.
Well, NAS sure found support and has already delivered its usual gifts for a 3.3% gain so far over the last 9 trading days with just 3 days left in this annual tech rally. Now that NAS has weathered a couple of days of selling, it looks poised to make another run at new highs.
But, if seasonality holds sway (as it has mostly this year) and the news flow from the Fed, Congress, the Trump administration, the Democratic candidates, tariffs, immigration and geopolitics remains volatile, the market is likely to hit the summer market volume doldrums on cue in the second half of July, setting up a pullback from the recent highs.
Support at 7333 at the March/June low is likely to come into play, which would be about a 10%. There is also some technical support below that around 7000, but let’s not get ahead of ourselves just yet. We are still positioned for more sideways action and backing and filling over the next few months, so we don’t expect a big summer rally and use any further strength this week to shore up your portfolio for the usual summer swoon.