This past week, we informed our Gold Members that the market should rally and form a peak between July 29 – August 1. Our models still confidently project this peak to arrive tomorrow if it did not already come on Friday. Significant selling should occur thereafter. Over the next 10 days, the stock market has the potential to crash and complete the sell-off of 2022. While not guaranteed, odds favor a binary geopolitical event as the catalyst. Biden’s second COVID diagnosis, Pelosi’s potential visit to Taiwan, and Russian activity in Ukraine are all possibilities.
The low which forms over the next 2 weeks should be the final low of this sell-off. Markets will then be unrestrained to rally into the end of 2022. There is great potential for the Dow, S&P, and Nasdaq to each reach or exceed their all-time highs. While the technical definition of a recession has been met, we do not expect the ‘real’ recession to arrive until 2023. The year-end economic outlook appears very strong, and while GDP has now declined for two consecutive quarters, it should improve over the next several months until the beginning of 2023.
Last Week’s Economic Data:
CB Consumer Confidence: Miss
New Home Sales: Miss
Core Durable Goods Orders: Beat
Pending Home Sales: Miss
FOMC Interest Rate Decision: Neutral
GDP (Q2): Miss
Initial Jobless Claims: Miss
Core PCE Price Index: Miss
Upcoming Economic Data:
Monday: ISM Manufacturing PMI
Tuesday: JOLTs Job Openings
Wednesday: ISM Non-manufacturing PMI
Thursday: Initial Jobless Claims
Friday: Non-farm Payrolls, Unemployment Rate (July)
