Market Preview – trading plan for July 25, 2016

Weekly outlook  — S&P 500 CASH INDEX

The S&P 500 cash index ($SPX) closed at 2175.03 last Friday, up 13.29 points for a 0.6% weekly gain.

Last week: The SP500 index made new highs early in the week and later spent more time going sideways. But it did close on all-time highs – again – on Friday.

This week: The FOMC announcement will be coming out on Wednesday and rumour and anticipation will likely roil the markets, although no rate increase is expected. The market will also be watching the Jobless Claims on Thursday.

Technical analysis

1. S&P500 index weekly


SPX July 22, 2016. Weekly chart.

The S&P 500 has been holding the price up quite well since the index broke the long-term resistance at 2135. The long-term trend is up and bullish.

The weekly PMO and Slow STO indicator keep rising and show bullishness out there. Also there is a positive divergence between PMO and price.

The minor short-term pullback shouldn’t do any damage to the long term uptrend. Instead it will give buyers a chance to enter at their preferred level.

2. Short-term S&P500 Daily Chart


SPX July 22, 2016. Daily chart.

The short term has an extremely overbought condition. The market has been in rally mode for 13 of the past 18 trading days, up 184 points from June 27’s low at 1991 area.

The SP500 index may soon take a rest for a while. We may see more consolidation moves and a round top pattern below 2190 this week.

Daily outlook – S&P 500 MINI FUTURES (ES)

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This section contains the outlook for this week and the buy/sell levels for Monday. It is reserved for paid subscribers.

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