Running on fumes
Optimists would love to see the rally roll through summer. But take off the rose-tinted glasses, and the picture gets darker: the market is running out of steam, and the warning signs are stacking up.
For one, despite the back-and-forth strikes between the US and Iran, oil didn’t bounce meaningfully last week. That kind of overconfidence isn’t a good sign.
On top of that, yesterday’s stars are losing ground in total denial.
SpaceX, which went public to much fanfare, is now down 24% from its June 16 highs. Elon Musk tried to turn the tide by announcing $100 billion in projected revenue for 2028, but the spring seems broken.
Zoom out, and despite hopes of a comeback, the Magnificent 7 are now setting some grim records. Nearly $3 trillion in market cap went up in smoke during June, a drawdown without precedent for the group.
My trading plan
Once again, Dow Jones futures are trying to start the week on the right foot, but just like last Monday, the energy is once again defensive.
This morning, buyers are trying to defend the support formed by the monthly Resistance 1 at 52,208, hoping to launch another push toward new highs. But things could deteriorate quickly if that key level breaks.
Given that backdrop, I’m sticking with short trades, with my sights set on the buyers’ stop-losses sitting below support at 51,692.
Happy trading!
Maxime holds two master’s degrees from the SKEMA Business School and FFBC. As founder and editor-in-chief of NewTrading.fr, he writes daily about financial trading.
No miracle
Counting chickens
Cliff dive