The S&P 500 (NYSEARCA: SPY) closed the week with a bounce off Fibonacci support at its 38% Fibonacci Fan and 23% Fibonacci retracement levels.
The intermediate posture (green line on Market Forecast indicator) remains strongly bullish and long-term Market Sentiment (orange line) is starting to roll up again.
Short-term sentiment is much improved with the near-term line (blue line) crossing back above 50 and into the upper-reversal zone on the Russell 2000.
The 3-month and 1-year Rate of Change (ROC) are positive and have room for growth but the strong 6-month ROC suggests any summer upside will be a grind.
The S&P 500 Index (INDEXSP: .INX) is sitting right at the top of its value area of its one-year Volume Profile – ready to breakout. It is also sitting near the Value Area High of its 1-year Volume Profile. A breakout above 292.50 would signal that the proverbial train has left the station.
The long-term (weekly and monthly) Market Forecast charts also point to this spring period of weakness as a potential launching point for a gradual increase into year end.
Volumes, trading ranges and volatility also point to a sustained bullish intermediate trend. Of course, short-term charts show areas of support that any negative outcome from this weekend’s G20 summit could break below and alter the bullish expectations.
Summary: The posture remains strongly bullish despite recent weakness that was actually led lower this week by safe haven sectors. Even small-cap stocks outperformed at the end of the week, which may be a precursor of what’s to come for the rest of the broad market. Of course, risk events like the G20 summit can throw anyone’s technical analysis out the window, but markets are setting up a technical environment for a bullish outcome this weekend that can lead to more gains going forward from here.
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Stock Market Video – For the Week of June 29, 2019
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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.
