S&P 500 Short-Term Trading Outlook (1-2 Days): BULLISH
The S&P 500 is now within a few ticks of levels that were hit 10 trading days ago, and literally has made zero progress since mid-May as consolidation has taken over.
But 2 straight days of S&P 500 re-gaining nearly 25 points from low to high is bullish price behavior. This should lead a bit higher near-term.
2750-5 still looks possible.
S&P 500 Futures Chart
We’ll see if this trend takes over which has dominated the last few months, as early month bottoms give way to mid-month peaks and then selloffs into end of month. If so, the rally may prove temporary into early next week post holiday before a selloff into end of month and early June.
Tech and Industrials are carrying the market higher and should allow for a bit more upside into 2750-5 on S&P 500 futures before any stalling out.
As in prior sessions, 2741 is key for upside near-term, while 2700 is important on the downside.
The consolidation on Tuesday/Wednesday failed to do any real damage and was thought to be buyable.
Broader Markets…
The interesting developments outside of equities centered on precious metals rebounding sharply as yields continued lower again, stripping 14 bps off yields in the last five days, while the Dollar has slowly but surely begun to wobble a bit after its near straight line higher during the month of April. Commodities remain attractive near-term and are though to likely outperform equities over the next 3-6 months, as stocks enter a seasonally weak time, likely from mid-June into late July and potentially into October.
Overall, risk assets look early to be avoided heading into end of May, and this month might turn out different than the past three months which all saw persistent early month strength followed by mid-month peaks and end of month weakness.
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Twitter: @MarkNewtonCMT
Author has positions in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
