Weekly Stock Market Forecast

This week we have a stock market forecast for the week of 7/11/21 from our friend Bo Yoder of the Market Forecasting Academy. Be sure to leave a comment and let us know what you think!

The S&P 500 (SPY)

The S&P 500 (SPY) has been quite volatile over the last week and broke out to the upside without a lot of bullish sponsorship as forecast.

The news from the Federal Reserve on inflation was seen as “good,” and the market rallied hard in a knee-jerk reaction into Friday’s close.

I’m still expecting to see this rally fizzle out by next week. Still, interestingly enough, I have found some stocks this week that are worthy of long exposure, so I will follow their observed supply/demand pressures and add them despite my unenthusiastic view on the S&P 500 itself.

Simon Property Group (SPG)

Simon Property Group (SPG) Is a tough one because of the weekly nature of these forecasts. When I made my initial forecast in SPG I said...

This will likely produce one of two outcomes...

The stock will retest the lows near $125, and that support will hold again, confirming that the weakness was little more than a cycle within a complex correction.

Or...

As the stock tests the lows near $125 per share, the bearish aggression will increase, and a breakdown will occur to take the price down towards the $120 per share area.

Well...

We DID get the breakdown below the key support at $125, but the decline came short of the $120 green zone, bottoming out near $122 per share. That was an elegant place to take profits, but since I research, generate and publish these columns on Friday’s I have to wait, and we saw a violent bounce back as a result.

The stock now hovers near the entry area, and while it’s likely that this bounce will end up being nothing more than a whipsaw, I don’t think it’s going to be a quick or pleasant experience. So unless things weaken substantially next Monday, I’d consider a scratch in SPG.

Nektar Therapeutics (NKTR)

In Nektar Therapeutics (NKTR), we have an opportunity for long exposure that will likely remain independent of overall market weakness. This company makes biopharmaceuticals and is working on therapies that can be used for cancer treatments. Unfortunately, I’m guessing it hasn’t been going well because this stock has been in a long and sustained bear market since topping out near $110 per share in 2018. Having fallen more than 80% from its highs, it’s now showing the first real signs of a bottom...

This price action is what I call a “low-level base,” and it is the behavior that a stock exhibits when positions of size are being slowly and carefully accumulated. Once the “big dogs” get their positions filled, there will likely be a “mark up phase,” where you see a lot of great news come out and a media blitz as folks go on tv to talk about how great this company is.

Is this shady manipulation?

Of course! And it’s always been this way in the market...

Here is how I believe how the story will unfold...

I believe that this company will “discover” a use for their therapies in the fight against COVID, and that will be the catalyst for the media surge and will cause a few weeks of “panic buying” as the rest of the market tries to jump on this train as it leaves the station.

This opportunity has a lower chance for success, I would put it at about 65%, but if or when it launches, there will be a lot of profit available. This offsets the higher chance for a stop-out, and so I’m excited to see what kind of moon shot this little stock can deliver in the weeks and months to come. Any price within the green zone would be considered attractive, and this trade would stop out if it breaks below the $16 per share area.

Harley-Davidson, Inc. (HOG)

It’s been a long time since I saw a complex correction as clean as we see in HOG.

This stock has been hovering near highs for some time, and this week saw aggressive bullish accumulation near the $44 per share area. I suspect this higher low will be the trigger point which first rallies the stock up near the recent range highs near $47 per share; then I would expect to see strong bullish sponsorship, which would provoke a breakout and likely take the stock back up for a retest of the highs near $52 per share.

A very straightforward trade, any price within the Green Zone would be considered attractive... with stop-loss orders set below the $43 per share area.

There's no clear exit point for this yet, so I will let the observed indications of bullet regression dictate my management of this trade. Still, I have great hopes that we could see a breakout and rally to new highs if the bullish interest does dominate over the next couple of weeks.

To Learn How To Accurately and Consistently Forecast Market Prices Just Like Me, Using Market Vulnerability Analysis™, visit Market Forecasting Academy for the Free 5 Day Market Forecasting Primer.

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Bo Yoder
Market Forecasting Academy

About Bo Yoder:

Beginning his full-time trading career in 1997, Bo is a professional trader, partner at Market Forecasting Academy, developer of The Myalolipsis Technique, two-time author, and consultant to the financial industry on matters of market analysis and edge optimization.

Bo has been a featured speaker internationally for decades and has developed a reputation for trading live in front of an audience as a real-time example of what it is like to trade for a living.

In addition to his two books for McGraw-Hill, Mastering Futures Trading and Optimize Your Trading Edge (translated into German and Japanese), Bo has written articles published in top publications such as TheStreet.com, Technical Analysis of Stocks & Commodities, Trader’s, Active Trader Magazine and Forbes to name a few.

Bo currently spends his time with his wife and son in the great state of Maine, where he trades, researches behavioral economics & neuropsychology, and is an enthusiastic sailboat racer.

He has an MBA from The Boston University School of Management.

Disclosure: This article is the opinion of the contributor themselves. The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. This contributor is not receiving compensation for their opinion.