S&P Cleared Key Resistance but Upside to be Limited

S&P cleared key resistance, breaking out from a 6-month sideways trading range. Consecutive close above 2800 this week would signify a breakout and bullish reversal, supporting upside follow-through in the weeks ahead. However, market is short-term overbought following recent advance. There could be a sell-off in the offing but it would be shallow if so

S&P Held Minor Support But Upside Could be Limited

S&P held minor support this week. While there seems to be room to go higher, traders must be mindful that the return of overbought conditions on the daily chart. While overbought condition is normal during a pro-long uptrend, it’s suggested that upside momentum might not sustain without at least a short-term breather. With this in mind we’d consider increase exposure into short-term dips rather than chasing breakouts

S&P Oversold Rally Failed at Formidable Resistance

our near-term work on price structure and momentum suggested strongly that the late June oversold relief rally has come to an end. S&P’s 2750 is the line in the sand. If the index fails to hold above it this week, then the next stop will be 2700 with the possibility of a brief breakdown below that level

S&P at Key Juncture

S&P is at key technical juncture. Current rally is testing formidable resistance at the important sentiment 2800 zone. The longer the index stay below that level, the more vulnerable it is to lower prices.

Return of Overbought Conditions Will Keep the Lid of the Upside

Bank stocks rose at least 2.5 percent, led by Bank of America, Citigroup, Goldman Sachs and J.P. Morgan Chase. The Financial Select Sector SPDR ETF (XLF) jumped 2.29 percent to 27.28, down 2.2 percent YTD. Now the question is whether recent rally is a beginning of a new upswing or it’s merely a dead cat bounce?

Aggressive Traders might Use S&P’s 2800 like a Magnet to Sell Against

S&P broke out from the short-term sideways trading range. The index is ticking ever closer to 2800, a level it has not breached since market broke down in late spring. But it may have to take a breather before it gets there. Some aggressive traders might use 2800 like a magnet to sell against, but it doesn’t have much significance outside of just being a nice round number

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