U.S. Equities Trading Outlook: Bulls Still In Charge

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

I am expecting 2860 to be challenged and exceeded in the week ahead before any top.

“Time” remains a bit early for any top. However, I think 2785 is a stop out area for short-term longs.

The S&P 500 is still trading near levels that were seen 11 days ago, so the past couple of weeks has done little to nothing to the larger trend.

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As stated in previous notes, given that Demark exhaustion is premature and price has not weakened down under 2785, this looks to be a consolidation that still should be resolved by a move to the upside.

The Bottom Line: I believe that it’s still right to hold longs, expecting a challenge and move above 2866 before highs are in.

S&P 500 Index Chart

sp 500 index stock market bullish rally news friday march 29 investing outlook

Yesterday’s trading yet again proved to be a large non-event for Equities as the trading month and quarter comes to a close today with the 12.31% gains proving to be the largest quarterly gain since Q3 2009.

This can’t last in my opinion, yet we’ll need to see a bit more to think stocks are turning down. SPX is largely at the same area it was back in early March nearly 3 weeks ago, with yesterday’s 2815.44 close less than 4 ticks above levels hit 11 days ago.

Technically, my opinion is that this slowdown should lead higher into next week and a “final” breakout of this range should result in a test and potentially a minor move above 2860-6 before a top into the end of the first week of April. For now, despite the breadth and momentum slowdown, it’s premature to exit longs until weakness (on a close) dictates. So for the record, I DO expect a reversal in April , and DO feel that upside is limited. I just can’t turn negative here given a real lack of bearish price action.

The rotation thus far has helped to bail out the market, and this WFC CEO stepping down likely will help Wells outperform and at 6.7% of the XLF, likely is a positive force for Financials into end of Quarter today.

Outside of Equities the real mover, of course was the US Dollar, inching up again, albeit nearly Half a cent, strong enough to send GBPUSD and EURUSD breaking down, along with commodities and specifically Precious metals.

My thinking is this should prove short-lived, though technically it’s wrong to step in and fade the Dollars move just yet, as well as the weakness in Precious metals. For the intermediate-term, this washout in precious metals should allow for a decent buying opportunity into April. For now, this is premature in my view.

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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.