the odds are better for a good august market after julys strong gains but some strategists who watch stock charts expect at least one more big round of selling before the market glides higher into the end of 2022 for now there are some overall bullish signs for the market like the roughly 135 gain for technology stocks in july the drop in bond yields and the improvement in market breadth bank of america technical strategists studied the performance of the market in august and september after the s  p 500 racks up notable gains in july they found that after a july rally of at least 5 the s  p 500 was higher in august 59 of the time with an average return of 2 it also was higher in september 55 of the time with an average return of 07 but in midterm years when july is up 5 or more the s  p 500 was up 77 of the time in august however returns were lower averaging just 1 in september during those years the s  p 500 was up 69 of the time with an average of return of about 13 july 2022 marks the best july ever during the midterm year of the presidential cycle a positive july bodes well for august and september in the midterm year noted the bank of america strategists choppiness around the corner mark newton fundstrat global head of technical strategy said he expects stocks to see some turbulence early in august before the market improves later in the month and continues higher into midseptember at that point there is the potential for more chop before a move higher into year end i think its likely the first couple weeks of august have the potential to be a negative and the back half should be very strong he said newton also expects the back part of the year to be strong the pattern seen in many midterm election years ari wald head of technical analysis at oppenheimer said august in general tends not to be great but september could be worse im worried about september were not there yet its not that august is good you dont usually see a lot of progress its technically a belowaverage month he said wald said however he is in the market recovery camp and the market is basebuilding the market is continuing to build off junes capitulation low he said noting rising bond yields have moderated i think theres upside into 4300 in august but there could be another bout of selling in september that takes the market to a low that would still be above junes low of nearly 3637 following that move stocks could turn higher in the fourth quarter he added august emerges as the true tell btigs chief market technician jonathan krinsky does not believe the market has bottomed just yet he expects stocks could find a new low in the next month or two and then head higher he expects a fresh low around 3500 on the s  p 500 but krinsky said he could be dissuaded from his view the s  p 500 has not bottomed if it were to rise to key levels 4177 was the june high july was inside junes range so if we took junes high that would be notable he said strategists have been watching the 4177 level on the s  p 500 as a point of resistance the s  p was flat at about 4112 in afternoon trading monday krinsky said if the s  p 500 were able to go above junes high that would be a positive and suggest the trend is shifting he also noted the 50 retracement level of the s  p 500s entire decline is 4231 typically in a bear market once there is a decline of 20 or more on a closing basis the index rarely exceeds the 50 retracement level unless it has already put in a bottom its hard to call july anything but a true win for the bulls but august is likely the true tell he noted fundstrats newton said one sector that could suffer in august is energy he expects oil down nearly 5 on monday could continue to decline to the 85 per barrel range west texas intermediate crude futures were just under 94 per barrel in afternoon trading most of energy can get smushed in the short run he said i am a longer term energy bull but in the near term oil is making a technical break energy is not going to be the place to hide in august newton said