S&P 500 (SPY) Trading Outlook (3-5 Days): Bullish, but aware of potential for stalling out.
I am now paying close attention to a pivotal price area for the S&P 500 ETF NYSEARCA: SPY at the June 8 highs. While cycles suggest a possible turn can happen, we’ll need to see proof.
For now, I expect Financials, Industrials, and Healthcare to see follow-through higher, despite Tech lagging. This could keep the market mixed.
SPY has rallied right up to June highs, a level which very well could cause some stalling out in the days ahead.
However, one needs to be on alert for any evidence of breakouts above this level, given the surge in Consumer Discretionary, Industrials, Financials and Healthcare over the last couple days.
These are hugely positive developments technically and might serve to outweigh the negative of the Technology Sector (QQQ) stalling out.
The Bottom Line:Â Â If the S&P 500 stalls out and pulls back, this should serve as a buying opportunity for a push up into mid-August to test all-time highs. Any failure to pullback by next Monday which follows-through could actually lead to new highs sooner than later. Despite the low levels of Equity put/call ratio, we’ll need to see proof that markets can stall here. It makes sense to hedge gains only with very tight stops on hedges while overweighting Industrials, Healthcare, and many Financials in the short run, seems correct.
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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.
