Bullish stocks (DAX and S&P 500 forecasts)

Intermediate
  • Strong gains from global stock averages on Monday, as we highlighted last week.
  • The “risk on” theme has been buoyed by the agreement on the EU Recovery Fund over the past 24 hours.
  • Plus, from hopes from positive trials for both treatments and a vaccine for COVID-19.
  • Here we look at the German and US benchmark share indices, the DAX and S&P 500 forecasts for today, or late July and into August.

 DAX day trade outlook: Bullish theme reinforced

Day trade update and view

A setback and bounce on Monday from just above our 12791/758 support area (from 12792.5), to then push above the recently set cycle peak at 12934 and above the 13000 psychological/ option barrier, to keep the risks to the upside for Tuesday.

Day trade setup

  • We see an upside bias for the February swing resistance at 13158.5 and 13250; a break here aims for the February bear gap at 13421-492.5.
  • But below the 13021 aims for 12926.5; a break here targets the 12792.5/758 support area, possibly 12612.

DAX intermediate-term outlook

The late May rally above 11417.5 signalled an intermediate-term shift from a bear trend to a broad, neutral range and the acceleration above the 12275.5 swing peak from early March, sets an intermediate-term bull trend.

  • Upside risks: We see an intermediate-term bull trend and risk for 13824 and 15000.
  • What changes this? Below 11589.5 shifts the intermediate-term bull trend straight to an intermediate-term bear trend.
6 Hour DAX Chart
6 Hour DAX Chart

S&P 500 day trade outlook: Bullish theme extends

Day trade update and view

A Monday rebound from just above modest, initial support at 3188.5 from 3190.25, to retain the positive tone from the mid-July advance for a better push through the 3231.25 key June cycle high (for an intermediate-term bullish shift) and the new 3233.25 high, to leave the threat to the upside for Tuesday.

Day trade setup

  • We see an upside bias for February targets at 3260.0 and 3286.0; a break here aims for the February bear gap at 3312.0-28.0, maybe 3375.0.
  • But below 3222.75 aims for the 3190.25/88.5 area; below here possibly opens risk down to 3157.0 and even 3119.0.

S&P 500 intermediate-term outlook

The early July push above 3231.25 signalled an intermediate-term shift back to a bull trend.

  • Upside risks: We see an intermediate-term bull trend to aim for 3397.5 maybe 3500.0.
  • What changes this? Below 2983.5 shifts the intermediate-term bull trend to neutral; through 2923.75 to an intermediate-term bear trend.
6 Hour S&P 500 Chart
6 Hour S&P 500 Chart

Editor in chief

Steve Miley has 29 years of financial market experience and as a seasoned expert now has many responsibilities. He is the founder, Director and Primary Analyst at The Market Chartist, the Editor-in...continued

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