Independence Day in the United States was celebrated over the weekend and the stock market remained closed on Monday, July 5, in observation of the holiday. The stock market will reopen again today at 9:30 a.m. ET for normal trading hours for the rest of this short trading week.

There are no notable earnings reports coming up during this first full week of July. Economic data is fairly muted as well, after Monday's Independence Day holiday. Nonetheless, investors will be keeping an eye on updates from the Federal Open Market Committee (FOMC) in the middle of the week, as well as a fresh jobless claims data. All economic dates listed here are tentative and subject to change.

Today's economic calendar will feature the final Markit services purchasing managers' index (PMI) and the Institute for Supply Management (ISM) services index. 

The following company is slated to release earnings today, July 6:

SMART Global Holdings Inc. (NYSE:SGH -- $48.10) designs and manufactures electronic products focused in memory and computing technology areas. SMART Global will report its Q3 earnings of 2021 after the market closes today.

Looking ahead to tomorrow, Wednesday will bring job openings data will be featured, as well as minutes from the FOMC meeting. All economic dates listed here are tentative and subject to change.

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Wall Street crossed over into the second half of the year, as well as a new month and quarter this week, and the transition was a seamless one. All three major indexes exhibited mostly positive price action throughout the week, adding to the notable returns garnered during the first half of 2021. Specifically, the S&P 500 (SPX) roared up the charts in a seemingly unstoppable climb, stringing together six-straight record closing highs, and well on its way to number seven, after hitting an intraday peak earlier in today's session.

Monday's trading did start off a bit rocky, as the Dow Jones Industrial Average (DJI) dropped 150 points while energy and transport stocks floundered. The tech-heavy Nasdaq Composite (IXIC), on the other hand, joined the S&P 500 in logging fresh records, with a spotlight shining on outperforming Big Tech. The weekend's infrastructure deal in Washington D.C. was also on investors' radars, amid news that U.S. President Joe Biden would not veto the legislation, even if it meant forgoing a Democrat-favored reconciliation bill. By Tuesday, sentiment was cooling, with the Nasdaq and S&P 500 barely eking out wins as anxieties about the easily transmissible Covid-19 Delta variant weighed.  

The second quarter and first half of the year officially came to a close on Wednesday, and traders eyed substantial growth for all three indexes, though markets were mixed on the day and the Nasdaq wound up snapping its back-to-back win streak to turn slightly lower. By Thursday, however, stocks were bouncing back, as upbeat jobs data injected some optimism into markets after weekly jobless claims hit a pandemic-era low. This rally has bled into Friday's trading, as investors gear up for the three-day Fourth of July weekend. At last glance, the Dow, the S&P 500, and the Nasdaq are all on pace to log their second-straight weekly wins, as the Cboe Volatility Index (VIX) -- Wall Street's  "fear gauge" -- heads for its lowest close since February 2020. 

Must-Snag Stocks in July (And Which Stocks to Avoid)

A brand new month means another study from Schaeffer's Senior Quantitative Analyst Rocky White digging into seasonality and how investors can work it to their advantage. Of the best 25 stocks to own in July, historically, Google parent Alphabet (GOOGL) easily topped the list, which could bode well for options players that might want to get in on the rallying FAANG name. Meanwhile, the list of the 25 worst performers could give clues into one sector traders might want to put the breaks on this month. 

How Companies are Responding to Covid-19 Right Now

The easily transmissible Delta variant of Covid-19, along with the uneven distribution of vaccines globally, which has led to extended lockdowns throughout the world, has certainly put some weight on reopening optimism. We covered several corporations which have been responding to these new fears in an attempt to get the virus under control. Johnson & Johnson (JNJ) said today that its vaccine is showing efficacy against the Delta variant for up to  eight months following immunization.

On the other hand, Altimmune (ALT) scrapped its Covid-19 vaccine trials, sending its stock spiraling, after the company said it would focus its efforts on the development of its liver and obesity treatments. Another big name that's had a hand in the distribution of vaccines, Walgreens Boots Alliance (WBA), stepped into the earnings confessional. The company reported a quarterly profit and revenue beat, and added that it administered 17 million jabs in the third quarter, with 28 million vaccination in total forecast for 2021. Despite the upbeat report, the stock took a serious nosedive on Thursday. 

What Could Move Markets After The Fourth

The week following a holiday notoriously known for fireworks might act as a reprieve for some investors, with a relatively bare economic calendar on deck. The most notable event will come mid-week as the Federal Open Market Committee (FOMC) releases its latest meeting minutes, while another round of weekly jobs data will also move markets. In the meantime, check out a sector-by-sector breakdown of options sentiment from Schaeffer's Senior Quantitative Analyst Rocky White, along with an in depth analysts of the latest FOMC meeting, as stocks reversed some of their expiration week losses, courtesy of Senior Vice President of Research Todd Salamone. 

Earlier this week, cryptocurrency leader Bitcoin (BTC) saw a surge in buzz-worthy headlines, as it took investors on one of its patented roller-coaster rides. On Tuesday, June 22, Bitcoin dropped below the $30,000 level early in the session, before turning positive later in the day to settle just below $33,000. That same day in its Morning Lineup, Bespoke had already made a brief comparison of BTC to the recent action of bull traders, in which it said, "Bulls look like they have a little more gas in the tank after [Monday’s] big rally, as futures are modestly higher. Crypto assets are another story, though, as bitcoin just broke through $31,000 and went tight through $30,000 after that."

 

Bitcoin has arrived at the past 161.8% Fibonacci extension. Big spot for bulls to hold; otherwise, 20k could be in the bears' sights. $BTC $BTCUSD pic.twitter.com/Wx4F05V13C

— Matthew Timpane, CMT (@mtimpane) June 22, 2021

Also occurring that same afternoon, Schaeffer’s Senior Market Strategist Matthew Timpane tweeted the above, pointing out BTC’s arrival at the 161.8% Fibonacci extension. Similar to when we speak about a Fibonacci retracement, the extension projects the position a stock’s shares could move to next. These levels often are of interest to traders, as they can help establish potential areas of support or resistance and indicate a good price target.

Digging deeper, Timpane notes that historically, great risk/reward trades have been set up throughout the bull rally by the weekly Fibonacci levels from the December 2017 high to the December 2018 low. Therefore, if we are entering a bear market, why wouldn’t these levels once again set up great risk/reward trades?

These types of trades work just like the pivot points you can see on BTC’s climb higher (in the chart below). BTC held the critical 161.8% Fibonacci level, which is in line with the equity’s year-to-date (YTD) breakeven mark and the lower range of the YTD Volume Point of Control (VPOC). In fact, BTC rallied hard off it, just like vicious bear market rallies in any market. To mark a longer-term bull signal, we’ll want to see a move above its 21-week moving average and eventually, see a bullish cross with the eight-week moving average. And although it produced a few false signals in the past, for the most part, it’s has been a good gauge for intermediate to longer-term trends. As an example shown on the chart below, Bitcoin precisely failed at the eight-week and 21-week moving average crossover and happened last week, before they dropped to the 161.8% Fibonacci level. And, the current trading range should continue to shrink as the moving averages fall, until we see an upward or downward break of those levels.

In closing, bulls will want to continue to hold this level and flesh out a bottom. If this level is breached, we could see a move towards $20,000 fast, as the cryptocurrency breaks YTD, VPOC, and YTD breakeven areas. Another potential trigger for this type of a pullback could be the next pivot level, if it occurs near the December 2017 high’s and the anchored volume weighted price average (AVWAP) from the last major low in March 2020, before the big breakout that happened in late 2020.

Subscribers to Bernie Schaeffer's Chart of the Week received this commentary on Sunday, June 27.

Welcome back to our weekly series, Schaeffer's Cannabis Stock News Update, where we recap what happened in the world of marijuana stocks last week, and look ahead to how the cannabis industry continues to shape up in 2021.

Investor interest in the cannabis industry is growing at an explosive rate, and the leading players continue to break through legal barrier after legal barrier, especially in the United States. More than 40 U.S. states legalized recreational and/or medical marijuana by the end of 2020. Now, companies are starting to see the opportunity in cannabis cultivation, marketing, distribution, and technology.

This week, a key Senate committee overwhelmingly approved a proposal that allows medical marijuana use in North Carolina for certain conditions, and also sets up a state network for supply and distribution. This was a historic vote, as no North Carolina Senate committee ever voted on medical marijuana. While one House committee voted down a proposal back in 2015, no bill had been heard in either chamber until this bipartisan vote.

Here is a quick roundup of major (and action-worthy!) cannabis stock news this week:

Apple Inc (NASDAQ:AAPL) made a major cannabis move this week. The tech concern updated its App Store policies to allow marijuana-focused apps as well as dispensaries to qualify for a store listing. Notably, Alphabet Inc (GOOGL) has not updated its ban on pot-related apps from the Google Play store just yet.

22nd Century Group, Inc. (NYSE:XXII), a leading plant-based biotechnology company focused on cannabis research, announced on July 1 it signed a definitive agreement to restructure its strategic investment in Panacea Life Sciences, in line with the ongoing development of the company's strategic partnership network.

cbdMD, Inc. (NYSE:YCBD) announced the closing of its underwritten public offering, for total gross proceeds of $16,500,000, before underwriting discounts, commissions, as well other offering expenses payable by the company on July 1. What's more, the weed concern sold an aggregate 2.2 million shares of its 8% Series A Cumulative Convertible Preferred Stock, including 286,900 shares sold upon full exercise of the over-allotment option, at $7.50 per share.

The shares of Coffee Holding Company (NASDAQ:JVA), a company that has a 49% stake in hemp and CBD beverage brand incubator The Jordre Well, were in focus over the past week. The company announced it purchased a building as well as surrounding property in La Junta, Colorado, which has been home to its roasting operations since 2005.

GrowGeneration Corp. (NASDAQ:GRWG) announced on June 28 that it became a  member of the U.S. small-cap Russell 2000 Index (RUT), as part of the 2021 Russell index's reconstitution. RUT membership, which lasts one full year, is based on broad-market Russell 3000 Index (RUA) membership.

On June 28, HEXO Corp (NYSE:HEXO) announced that it would be closing on the previously disclosed transaction to buy its first U.S. production facility through a wholly-owned U.S. subsidiary. The approximately 50,000-square-foot facility in Colorado will provide consumer packaged goods (CPG) companies and consumers access to the "Powered by HEXO" technology and products.

Tilray, Inc. (NASDAQ:TLRY), a leading global cannabis lifestyle and CPG name, distributed a proxy statement on June 29, which included an open letter from Chairman and Chief Executive Officer Irwin Simon. The letter sought support for several proposals that will be up for a vote at a special meeting with Tilray stockholders on July 29. Plus, Tilray announced on June 30 its subsidiary, SweetWater Brewing Company, has launched a new product collaboration with leading craft cannabis brand Broken Coast Cannabis.

Village Farms International, Inc (NASDAQ:VFF) announced on July 1 that its wholly-owned subsidiary Pure Sunfarms has received an amendment to its cultivation license from Health Canada for its 1.1 million-square-foot Delta 2 greenhouse. This allows the company to cultivate cannabis immediately in the half of the Delta 2 facility for which conversion to cannabis production has been completed.

Florida-based Psilera Inc. announced on July 2 it secured $2.5 million in funding for research, scientific and clinical personnel hiring, as well as general working purposes. The company issued roughly 4.3 million shares to private buyers at 57 cents per share. Psilera has developed a patent-pending DMT transdermal patch that will be assessed in a Phase 1b clinical trial, and said on LinkedIn it seeks to "leverage its research strengths led by executives from the pharmaceutical and cannabis industries to develop a best-in-class IP portfolio of psychedelic analogues."

Raytheon Technologies Corp (NYSE:RTX) is slightly higher this morning, last seen up 0.6% to trade at $86.70, following news that it won a $2 billion U.S. Air Force contract to develop and manufacture a nuclear-armed cruise missile, replacing the aging air missile that was fielded in the early 1980s. Completion is expected by February 2027, with manufacturing taking place in Tucson, Arizona. 

RTX crested toward the $90 level early last month, hitting an annual high just below the level on Jun. 10. The 60-day moving average contained most of its subsequent pullback, though the 20-day moving average still looms as potential pressure on the charts. Year-to-date, Raytheon stock is up 20.6%. 

Analysts are mostly optimistic on RTX. The 12-month consensus price target of $98.18 is a 13.9% premium to current levels, and represents a region not yet touched by RTX. Plus, of the 12 covering the security, nine consider it a "strong buy" rating. 

Short-term options traders have been a bit  more put-biased than usual. This is per RTX's Schaeffer's put/call  open interest ratio (SOIR) of  0.66, which stands higher than 88% of readings from the past 12 months. 

Independence Day in the United States falls on Sunday this year. What this means for traders is that the U.S. stock market will be closed on Monday, July 5, in observation of the holiday. The markets will reopen for a four-day trading week on Tuesday morning at 9:30 a.m. ET. Happy 4th of July!

Today's trading session will feature May's nonfarm payrolls, the unemployment rate, average hourly earnings, trade deficit, and factory orders. 

There are no companies slated to release earnings today, July 2, ahead of the Independence Day holiday weekend.

Looking ahead to next week, there are no notable earnings reports coming up during the first full week of July. Economic data is fairly muted as well, after Monday's Independence Day holiday. Nonetheless, investors will be keeping an eye on updates from the Federal Open Market Committee (FOMC) in the middle of the week, as well as a fresh jobless claims data. All economic dates listed here are tentative and subject to change.

Schaeffer's Investment Research turns 40 this month! Celebrate with us with new weekly special offers throughout the month of July. Did you know that, when Bernie Schaeffer founded our company back in '81, equity options volume was only 432,000 contracts per day? Compare that to the 2021 daily average options volume of 39,000,000 options contracts changing hands on a daily basis! We really have been with options traders since the jump. MIC DROP.

** Schaeffer's Event Trader portfolio has doubled in value (+109.72%, to be exact) over the past six months by simply putting 10% of its portfolio into each simple put or call purchase recommended in the program! Compare that to the SPX that has only returned 11.93% over the same timeframe. To kick off the celebration for our 40th anniversary this month, Bernie is letting you take Event Trader out for a spin this month for just $4 by clicking here before July 4th! **