S&P 500 Forecast: July 2020

Robert Petrucci

As the month of July begins the S&P 500 finds itself starting almost exactly where June trading began.

June produced a month of value swings for one of the world’s most important indices. The S&P 500 began the month near within the 3000.0 vicinity and will begin trading near the same quantified value as July starts. However the S&P 500 has experienced large swings as its value climbed to the 3200.0 level early in June, only to experience strong selling and see its value plummet to nearly 2,975.0 in the middle of the month. The past week of trading for the S&P 500 has not been particularly kind as risk sentiment has decreased and the index struggles near 3050.0 juncture and fights to keep a steady upward pace.

As July beckons speculators cannot be faulted for asking who and what do you trust? Global indices react to the S&P 500 via its climbs and declines in value rapidly. Financial institutions are clearly continuing to put their money into the index, but there are investors who question the value of the index as economic outlooks remain hard to calculate as coronavirus concerns still shadow expectations.

The month of June produced dangerous gaps in quantified values for the S&P 500 as sentiment was throttled by emerging news dealing with coronavirus, protests in the US and international relations between China and the US. Volatility is not likely to disappear either, and traders should start to keep in the back of their minds the approaching US election for President which will be held in November.

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However as concerns certainly are expressed, investors still need to put the institutional money they manage somewhere. The decision to invest in the S&P 500 is not going fade away. The index is a staple and key indicator of US economic power. The index also enjoys a rather awkward and suspicious amount of support from US government policy as the Federal Reserve seems to prove it will not allow US corporations to falter. So the question from speculators about who and what you can trust gets answered with a resounding, ‘the system’. Confidence is the key to the puzzle for the S&P 500 like all other equity indices. As long as financial institutions remain confident in the markets and their ability to safeguard and create wealth, you should not probably bet against them.

Key support for the S&P 500 is the 3000 level, but it is a rather close target if risk appetite suddenly takes a hit. Traders need to practice good use of risk management when trading indices because moves cannot only be volatile, but they can challenge stop losses quickly and become a disaster if too much leverage is being used and you are on the wrong side of a trade.

However, for speculative traders who believe the direction of the S&P 500 has better upside opportunity than downside, a buy of the index could not be faulted at this time. Cautious traders may want to watch trading the rest of the week and early next week to monitor sentiment. If that is the case traders should look at the 3,100.0 juncture as an important inflection point, because if resistance is broken and the markets want to go higher a re-test of highs made in June could take place quickly.

S&P 500 Outlook for July:

Speculative price range July: S&P 500 2,900.0 to 3,300.0

Support at 2,950 look strong short term, but if broken the S&P 500 could falter to 2,900.0

Resistance at 3,150 appears important, but if a strong upward trend emerges the S&P 500 could target the 3300.0 juncture

SP 500

About the Author
Robert Petrucci
Robert Petrucci has worked in the Forex, commodity, and financial profession since 1993. Important aspects of his work involve risk analysis and advisory services. As an advisor in a Family Office he maintains a conservative approach for wealth management and investments. Robert also works in private finance with investors and companies delivering financial and management services.
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