Optimism in the Strait and IPO euphoria drove the rebound, but any minimal break next week could send markets tumbling again.
U.S. equities closed a volatile week with broad gains. Falling oil prices followed geopolitical headlines, and the blockbuster $SpaceX(SPCX)$ IPO stabilized the tape after a -4% sharp selloff in the $S&P 500(.SPX)$ and -6% in the $NASDAQ 100(NDX)$ .
The S&P 500 bounced and closed positive +0.65% for the week. the Nasdaq 100 (NDX) added 2.3%, and the $Dow Jones(.DJI)$ climbed 0.7%. The week was not clean, the S&P 500 and the Dow swung wildly mid-week on optimism about the conflict with Iran. Small caps joined the late rally with the $iShares Russell 2000 ETF(IWM)$ advanced 4.0% during the week.
SpaceX (SPCX): The company sold 555.6 million shares at $135 each, a $1.77 trillion valuation. The stock opened at $150, an 11.0% premium, and held 20.0% above the offer price through its debut. The the soft action shows declines in other mega-cap tech names as investors sell what they own to fund what they want. See the weekly heat map below with the Magnificent Seven declining while the broad SPX was green. Only $Tesla Motors(TSLA)$ made it for a bounce and semiconductors held firm.
Macro: Consumer data improved at the margin. The preliminary June University of Michigan Consumer Sentiment index rose to 48.9 from 44.8 in May, helped by lower gasoline prices early in the month. Inflation concerns remain elevated. The setup into next week is constructive but earned session by session.
Setups Blueprint: $Apple(AAPL)$ $Microsoft(MSFT)$ $S&P 500(.SPX)$ $Broadcom(AVGO)$ $SPDR Gold ETF(GLD)$ declined as expected this week🎯, and $iPath Series B S&P 500 VIX Short-Term Futures ETN(VXX)$ bounced as expected 🎯, all of them averaging a +5% gain 🎯🎯🎯.
With that said, I reframed a standard industry momentum map to a proprietary Heat Rank where I set the technical conditions from overbought to oversold and the reversal risk for all the securities in our watchlist. It has been useful to set a blueprint where every subscriber see the stocks better classified and navigated the ones highlighted or subscribers’ preferred stocks.
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