The stock market lost ground again last week, as participants drove volatile swings in the market. The S&P 500 (SPX) fell 30 points to 2889, a decrease of 1%. Based on near term market cycles, our projection is for another choppy week that temporarily moves higher.
Several factors drove last week’s choppy price action. First, the yield for the 2-year treasury notes rose above that of the 10-year notes, a recession indicator. As well, political waves continued to rise in Hong Kong and Argentina. And finally, President Trump eased off on his threat to impose tariffs on consumer electronics imported from China.
S&P 500 (SPX) Daily Chart
Let’s look at a chart of the SPX. Our approach to technical analysis uses market cycles to project price action. Our analysis is that the S&P 500 has now begun the rising phase of its current cycle. As it just started, we see further upside potential, with a resistance zone at 2925-2950. For this week, we are projecting a choppy week that ultimately moves modestly higher.
WMT Stock Weekly Chart
Let’s also take a look at Walmart (NYSE:WMT), which rose last week by 5% to nearly $113. The company reported earnings per share of $1.27 and total revenue of $130.4 billion, above analyst estimates of $1.22 and $130.1 billion. Based on its market cycles, our view is that WMT is in the rising phase of its current cycle. We think there is potential in the intermediate term fro the stock to rise to new highs in the coming weeks.
For a more detailed analysis of both of these charts, check out the latest episode of the askSlim Market Week show.