Look to Increase Exposure into Short-term Market Dips

trading behavior in the S&P remains constrained by a short-term sideways pattern and shown little evidence of a sustainable change in trend. As for strategy, we’d look to increase exposure into short-term market dips

S&P Held Support but Upside Could be Limited

S&P retested and respected support at the lower boundary of its 2-week sideways trading range. Nevertheless, Wednesday’s rally attempt did not improve the posture of our short-term indicators, which remain supportive of further backings and fillings. S&P has 2750 to trade against. If that were to break, we could see 2800 next

S&P 2700 is the Line in the Sand

so far the May’s oversold rally has proved nothing as far as its staying power or as a possible trend reversal. While there is a high probability that the late-day selloff will momentum but an undercut below S&P’s 2700 is needed before there is any real prospect of a change in the short-term sideways trading pattern

Flat Flag Formation in S&P

S&P trapped in a congestion zone. The trading pattern exhibits characteristics of a flat flag. The fact that the S&P is basing sideways rather than correcting lower as market digested the early May’s massive rally indicating an internal strength. At some point the market will eventually breakout from the tight trading range. That, if and when it happens, should be a fierce move. And this is something traders need to look out for

S&P in High-level Consolidation Period

trading actions over the past few days represented an orderly high-level consolidation period in the aftermath of the early May massive rally. The S&P is trapped within the 2700 to 2750 narrow range. While several short-term indicators are pointing toward a fading trend, positive trading sentiment could help minimize downside risk. S&P’s 2700 marks the inflection point. We’d turn particular bearish if the index closes twice below that level. A failure to hold above that level indicates a change in sentiment and a much deeper pullback should be expected

S&P in Holding Pattern

market is in holding pattern as traders are watching to see whether or not the S&P can close the week above 2700. A failure to hold above key price level means that long-term buying pressure has finally been exhausted. On balance, we remain near term neutral/negative for S&P as we believe market vulnerable to some downside retracement over the short-to-intermediate term

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