Markets: Timing Kicks In. US Major Stock indices consolidate as we approach key levels.

S&P 500 cash (SPX) and NASDAQ 100 cash (NDX) made new all time highs. Just about a few points and closed lower for the week. Key timing to watch for next weeks.

Week in review

S&P 500 (SPX) and Nasdaq 100 (NDX) made new all time highs just by a few points: SPX by 5.57 points and NDX by 19.32 to be precise and closed lower for the week. Interesting point to note is that the indices closed lower after making new all time highs.

We can see that, last week the Asian indices such as the South Korea’s KOSPI performed well, up nearly 4%. European indices were the runner up. German DAX performed the best in the key European indices we follow here at Market Chart Pattern, up nearly 2%. France’s CAC 40 and FTSE 100 were up being 1.73% and 1.34% respectively. All the major US stock indices closed lower for the week. The weakest one is the Russell 2000 (not shown in the chart). Also interesting to note is that the Indian stock market SENSEX lost the most for the week and was down by -1.12%.

Below chart illustrates the Year to Date return for the stock indices. US stocks have a lot to catch up against Asia and Europe.

Sector performance in the US markets

Last week the rising star was the KRE in the Financial Services sector. This week we have not seen a good performance from this sector and the rising star is the Energy sector in the Gas and Oil exploration field.

However, on the Year to Date basis we see the Defence sector keeps on outperforming every other sector due to the geopolitical situations. Industrials and Financial Services sectors remain strong.

Stocks Outperforming the S&P 500

Stocks that were in favour by investors last Friday and outperformed the S&P 500 index daily return.

Stocks outperforming the S&P 500 on 3rd July 2025 before the long weekend.

Markets

Dollar

Dollar was stronger last week and closed the week higher. As discussed in the last week's newsletter we were expecting a sideways to a stronger dollar above 96 level, this is what transpired last week. The bearish symmetry is still in play but the dollar could still rally to 97.50 to 98.20. We do have lower target of 95-94 on the dollar index futures.

However, we could see the dollar rally if the stocks start to consolidate and move lower.

EURUSD

EURUSD reached our long term target of 1.1750 last week. Now the pattern is complete and this week we saw the EUR weaker agains the Dollar. The market is likely to consolidate in this area between 1.180 - 1.20 as dollar likely gets down to the level mentioned above in the Dollar index chart. However, if the bearish symmetry in Dollar is broken, then it would be an indication that we might have seen a pretty good top in the EURUSD. If the market remains persistently above 1.20 then this would negate this outlook.

Cable - GBPUSD

GBPUSD missed our target of 1.3800 by about 30 pips. On the daily chart we can see the pair was at the 1.618 expansion and found resistance from that level to close down by one big figure and now we have seen two consecutive negative weekly closes for this pair. This is an indication that we might have seen an import top the cable. If the 1.3700 level is taken out to the downside on closing basis, this will be a further confirmation.

However, if the pair closes above 1.20 on consecutive daily basis, this will negate this outlook.

USDJPY

This market remains range bound, however, dollar is getting stronger versus the Japanese Yen and the market is now testing the top of the range.

Bitcoin - BTCUSD

Last week, in the newsletter we discussed that the Bitcoin remained supported as long as it remains above the 38.2% Fibonacci retracement level and that ab = cd pattern formation. Last week, Bitcoin made new all time highs and is very close to hitting our weekly target of 120K, however, higher targets of 125K are also possible as long as the Bitcoin remains supported.

Debt Markets

2-Year Treasury Note

This bearish market symmetry is still in play and the market closed right there as could be seen on the daily chart with the blue line. Yield are trying to break above the 3.9%, however, seems to be finding resistance from the top of the range.

10 Year Treasury Note

Last Friday, the 10 year Treasury Note yield rose 1.77% to close the week at 4.42%. This is concerning. We can see the yields rise to 4.44%, however, the resistance at the 4.58% is still active, getting above 4.44% is likely to challenge this level.

30 Year Long Bond Yield

Last Friday, like the 10 Year T-Note, the long bond yield was up 1.98%. This is also concerning. Let’s see if get a follow through this week.

Comex Gold

Last week in the Sunday report we wrote:

‘The $64 question is where is the price likely to go next? As long as our support zone is held, we have a bullish bias for Gold. If, last Monday’s low at $3250.50/oz is the point C of 1:1 price projection, then we have a shorter term projection into $3550/oz to $3600/oz levels.’

This projection has held and the near term possible target is $3416/oz before moving higher likely.

Comex Silver

Is $50/oz coming? Silver market is getting stronger and weekly chart represents higher targets.

US Markets

This is the timing chart. Long time subscribers know that this has an uncanny ability to pick turns in the marketplace. Most recent one being the 7th of April and 5th of August 2024. We have important timing come in. Since this is a weekly chart, we have to give +/- 2 weeks, which is coming in pretty much now. Let’s see how the markets trade.

US markets on YtD basis have recovered all the losses and are now positive for the year as shown in the histogram charts above for the major indices we follow. Dow Jones could have made new highs as well, if it wasn’t for the United Health stock which had a massive move to the downside and the stock got reduced to half. If the stock remains like this, chances are, it will be removed the Dow Jones Industrial Index.

Major indices like SPX and NDX made new all time highs, however, closed lower for the week. This is in interesting development as the markets could enter consolidation as they hover close to our targets such as 6500 SPX.

Let’s review individual markets and see based on pattern recognition, what the markets are likely to do next.

S&P 500 Cash SPX

S&P 500 made new all time highs last week. This would have been a very difficult scenario to perceive back in April of this year. However, this is exactly what we were saying that chances were, we might have seen the low as we had a pattern completed both in price and time on the 7th of April. When price meets time the pattern is complete!.

Now, we have important timing come in. We will be paying very close attention to the price action in the up coming week. Chances are rising for the market consolidation, however, the markets remain resilient but it is time to be vigilant in the markets.

Higher targets for 2025 are 6500 which is the shorter term target and the markets in 2025 by the close of the year could target 6955 as illustrated in the weekly chart below. The 7th of April low is the key low the markets should respect and hold in 2025.

However, from the lows of 7th of April 2025 lows, the SPX is up 29% in a V-shape recovery. 6500 would take this gain to about 35% which is a big gain in a short amount of time. This leads us to believe that during the summer time the markets might begin to consolidate. In some of the European indices, which had been leading the US indices, we are already beginning to see this as we enter the summer time.

Nasdaq 100 Cash - NDX

NASDAQ 100 also made a new all time high last week and then closed lower for the week.

As illustrated in the weekly chart, the price is reaching the shaded region which is our target but the market could begin to see consolidation.

Russell 2000

Russell 2000, the small caps index, is the weakest of all the major indices we follow. The gains since April 7th lows have been capped by the 78.6% Fibonacci retracement.

World Markets

India’s SENSEX

German DAX

UK’s FTSE 100

Disclaimer

This post, any text used in the post, any images, video, audio and links be it internal or external are for information and educational purposes only and not a financial advice.