Stock Market Technical Comment
The stock market, as defined by the S&P 500 (NYSEARCA:SPY), remains in a large volatile, choppy mess.
HOWEVER, the latest decline into the end of June, according to some Elliott Wave (EW) counts, could be the end of the mostly whipsaw price action as the “500” finally gets in gear to the upside.
Yet, the index needs help – that is it needs the financial (XLF) and industrial (XLI) sectors to get off their back and show some strength. The higher beta indices (NASDAQ, QQQ, Russell 2000, S&P MidCap 400) are either near their January highs after a full recovery or in all-time-high territory. When looking at the market this way, it seems like the glass is more than half full.
S&P 500 Short-Term Chart (hourly)
On the one-hour chart, we can see that the “500” is turning it around after nearing its late May low just under the 2,700 area. No, this is not an inverse head-and-shoulders (H&S) pattern as the shoulders dropped too close to the head. But, the break above 2,745 opened the door once again for a move back toward the 2,800 area. There is a lot of resistance around 2800 so traders (and investors) should eye that level. At the recent late June low, there was a bullish divergence on the 14-period RSI and the hourly MACD, which was our cue that a rally was coming.
Intermediate Term Perspective (daily)
The key upside level remains the 2,800 region where there is at least four pieces of resistance. On the downside, trendline support, as well as the 200-day average, sit near the 2,675 zone. If we break above 2,800, we may be on our way to all time highs. Stay tuned!
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The author may have a position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.