Monday’s upside follow-through confirmed last week’s bullish breakout and opened up for a test of the more important resistance near the 2600-2640 zone. Near-term technical backdrop has been strengthened but does not appeared strong enough to generate sustain breakouts. With this in in mind, we would consider taking down exposure into additional strength, which we think could take the S&P closer to the trend channel moving average before a significant pullback unfolds
current price structure suggests that the S&P is in a process of establishing a near-term support plateau from where a new up-leg will base and climb in the days ahead.
this week’s bullish breakout had helped putting the bulls back onto the driver side of the market but it doesn’t mean that we’re out of the woods. Over the next few days, we will look for trading behaviors as the S&P probes key technical resistance near 2815. The market had historically developed minor resistance near that level. There is no reason to turn particular bullish until this zone is eclipsed
S&P broke key support Tuesday but return of short-term oversold condition on the daily chart could help minimize downside follow-through and widespread breakdowns