Weekly outlook — S&P 500 cash index (SPX)
The S&P 500 cash index ($SPX) closed at 2161.74 last Friday, up 31.84 points for a 1.4% gain for the week.
Last week: SP500 index had a strong breakout. It broke the multi-year resistance level at 2135 and managed to close above it by 1.50% gain above resistance line.
This week: Money will continue flowing into the US market. But a minor pullback can’t be avoided, especially as the US market is in the beginning of the second quarter earnings reporting season.
The weekly PMO indicator continues raising, and signals that the long term and medium term remain bullish. The Slow STO indicator is also rising and is supporting the price well.
If we see a short-term correction the index is likely to hold above the 20/40 week moving average. We still expect the upside target 2220 could be reached at some point.
The broken yearly resistance at the 2135 level could be acting as support this week. Beneath it, there is short-term support at the 2075-50 level and intermediate-term support at the 2025 level.
An ultra-short-term overbought condition could lead the index to make a minor pullback this week. But as long as price stays above those support lines, the major trend is up and bullish.
We will continue to see buying on the pull-backs. Those retracements, if they occur, will not seriously threaten the long-term uptrend unless the price drops below the 2000 level.
Daily outlook – S&P 500 mini futures (ES)
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