S&P 500 Trading Outlook: Next Week Looks Important

S&P 500 Index Trading Outlook (3-5 Days): Mildly Bullish

BUT upside likely limited into next week.

The S&P 500, Dow Jones Industrial Average, Nasdaq 100 and others are nearing targets in both price and time, so it looks likely that some type of stallout happens next week.

For today, though, this still looks early and the trend remains bullish. It’s right to stick with the trend until some evidence of a trend reversal.

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S&P 500 Chart Analysis

The S&P 500 has now joined the NASDAQ in exceeding its key trend line that most believed would serve as resistance for this rally. This now marks two different price areas that have failed to hold on gains in recent weeks (the first being 2630 near former November lows.

This should help prices rally a bit more over the near-term. While price targets are just fractionally above at 2715-7 for the S&P 500, we’re seeing Demark exhaustion being close to complete along with the index testing its 61.8% Fib retracement of the entire decline from September.

Some key cycles hit next week also which might result in a stalling out and trend reversal. For now, the trend remains bullish, but we’ll be on alert for evidence of any stalling out reversal of trend.

sp 500 stock market index 2700 investing analysis resistance chart

Other indicators:  For now, Equity Put/Call is starting to dip down to low levels (just above .50). But the VIX breakdown makes it look like the rally has a few more days. Thus while a trend reversal should be near, without proper evidence of any turn, or counter-trend sell, or negative breadth, it doesn’t make sense just to sell because prices have rallied.

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Author has positions 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.