Pullback & Launch

My Outlook for July and August

Last Sunday’s SubStack predicted a market pullback to $SPX 5,935, followed by a rally pushing it into the 6,200s—a forecast that proved spot on.

The market dipped to a low of 5,941 on Monday, then surged intraday, closing above the Pivot, which triggered the Daily Buy Signal.

The rally gained momentum through the week, reaching a high of 6,187 on Friday.

This was a textbook move, aligning perfectly with our expectations.

Despite challenges like inflation, tariffs, geopolitical tensions, and other macroeconomic issues, the market has demonstrated remarkable resilience.

I attribute this to two factors.

As noted in the previous SubStack, liquidity remains robust:

• Globally, central banks are actively reducing interest rates, with the U.S. as a current outlier, though this is expected to shift in September.

• M2 money supply reached an all-time high of 138T.

• The Fed has paused quantitative tightening (QT) and launched a $10T bond purchase program.

• The Big Beautiful Bill shows no indication of fiscal restraint.

In this update, we’ll cover:

• The expected start of the next pullback

• Our targets for the pullback

• Our targets for the rally following the pullback

We’ll also examine key macroeconomic trends anticipated later this year and explain why we think the bull market’s days are limited.

Within this, I’ll present two potential scenarios for year-end. Let’s get into the details…

Market Outlook

As mentioned in the previous newsletter, the bullish sequence that started in early April is expected to continue for a while.

I still hold the view that we are in the later stages of a broader market cycle that began in 2009. Once the Time & Price targets are met in this 17-year cycle, I anticipate a significant decline over the following 18 months.

With this in mind, let’s examine how this might unfold.