U.S Equity Market Trading Update Into Quarter End

S&P 500 Trading Outlook (2-3 Days): Make-or-Break Level is 2412

Yesterday’s early reversal failed to hold into the close, as the S&P 500 (INDEXSP:.INX) pushed back up above areas of importance.

2412, which has marked lows for the entire month of June was briefly violated but the strong surge has saved bulls… for now.

The Tech decline is getting increasingly worrisome, but the rebound and today’s advance is welcome for bulls. That side, traders should watch for further weakness. For now, on the final day of the week, month and quarter, prices have held key support.

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Any move back lower would immediately put a short stance back on the front burner and suggest a move down to 2385-90 as a first stop (i.e. support).



Well, Thursday’s decline made it seem like Tuesday’s direction was the RIGHT one after all, and not Wednesday’s snapback.  Yet, prices rebounded sufficiently to avoid breaking down under the lows of the past month (on a closing basis).

Into July 4 holiday, it pays to be extra vigilant on Technology as this sector is showing increasing signs of wanting to breakdown.  Thus far, the SOX has cracked the June lows, and the SOX along with MSH and XLK lie near weekly trendlines (extending up from last November’s lows). If/When the June lows are breached on a weekly close in all three, along with NDX, this would add conviction of a legitimate correction.

Outside of Equities, the global bond selloff continued with a vengeance this week, and US Treasuries followed suit to what has been ongoing for German Bunds, UK Gilts, along with French and Spanish bonds (which have also seen yields lift this week). Overall, this looks to be a positive force for Financials globally, and it’s thought that technically bullish charts of Healthcare, Industrials and Financials “should” be able to absorb a minor Tech selloff.  But that is to-be-determined… keep an eye on Tech!

S&P 500 Futures Chart Spotlight

The S&P 500 successfully rallied back above 2412 into the close, something that still hasn’t allowed for a true violation of the entire consolidation since June.  Given that the markets rallied to hold these levels, and we’re at the end of Quarter, it’s thought that perhaps equities might be able to pull out of this into July 4 without any serious weakness. HOWEVER, any move back down under 2412 on a close would in fact be negative and would be addressed and likely cause a move down to at least 2385-90.

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Twitter:  @MarkNewtonCMT

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.