Last Week's Losses Are Gone (Technically Speaking For 7/26)
Summary
- Small-caps regained prominence last week.
- New homes sales dropped.
- Last week's losses are gone.
All charts of economic data edged in blue with the word "FRED" in the upper left corner are from the St. Louis Federal Reserve's economic data system All stock charts are from the StockCharts.com website, unless noted otherwise.
This is from the author's personal notes:
Data from FinViz.com
Above is my shorthand way of tracking the key sector ETFs (top "panel") and major index-tracking ETFs (bottom "panel"). The sectors represent the entire "XL" series from State Street Global Investors with the exception of real estate, which is represented by "Q" for VNQ. Combined, they comprise the entire US economy. I only use the last letter of each ETF (for example, "B" is the XLB, "C" is "XLC" etc.). The bottom panel uses the last letter of the following ETFs: IWC, IWM, IJH, SPY, QQQ, DIA, and OEF. Together, these represent the entire spectrum of US indexes from small to mega-cap). A horizontal line in a column indicates that all ETFs below that level are negative.
The following trends are apparent:
- Utilities are underperforming in multiple time frames
- Energy is fallen sharply
- Industrials rose in the most recent time frames
- Communication services are a top-performing sector
- Tech is rising in importance/prominence
- Health care is strengthening
- Last week, smaller-caps reasserted their leadership role
- Last week, larger-caps lost some ground
- This will be a big week for economic news
The census releases durable goods orders on Tuesday.
The headline number (left) has completely erased all its losses caused by the pandemic. New orders less transportation (right) are at a five-year high.
Dow Jones releases the Case-Shiller Home Price Index on Tuesday:
Both the 20-city (left) and 10-city (right) indexes are rising at levels rivaling those during the housing bubble.
The Fed issues its latest policy on Wednesday. Pay particular attention to the Fed's statement about inflation. Don't expect the Fed to change its policy.
The BEA releases the first estimate of 2Q20 GDP on Thursday. 
The above chart is from the Atlanta Federal Reserve. It shows the range of the Blue-Chip economic consensus (the shaded area) along with the Atlanta Fed's own estimate (in light green). The lowest estimate is ~7% - a very high rate of growth.
The above chart shows the New York Fed's Nowcast, which is currently very low relative to other estimates.
The BEA releases personal income and the PCE price index on Friday. Of particular importance in the PCE price index:
Both the total PCE index (left) and core (right) jumped sharply in the last report.
New home sales declined (emphasis added):
Sales of new single‐family houses in June 2021 were at a seasonally adjusted annual rate of 676,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 6.6 percent below the revised May rate of 724,000 and is 19.4 percent below the June 2020 estimate of 839,000.
Here's a chart of the data:
My best guess is that high prices are starting to hurt.
Let's take a look at today's performance tables from StockCharts.com:
When the top-performing sector is up .36% and the bottom performing index (the dollar) is down .32%, you can officially say it was a nothing day. 
The sector table is marginally better. As usual, energy is the top-performer far out-pacing the second-best gainer, the XLB. Consumer discretionary was up .74%. After that, performance tapers off.
Right now, the main story is that most of last week's losses are now gone:
DIA 30-day
The DIA is at a 30-day high, as is ... 
SPY 30-day
... the SPY.
QQQ 30-day
The QQQ is just shy of a month high.
IWM 30-day
The IWM, however, is trending sideways.
I wouldn't expect more activity until Wednesday, barring surprise data.
This article was written by
Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.