We tend to think that with the S&P 500 up 10 days in a row, and with momentum stalling out yesterday, it may be time for at least a small pullback. This market has been higher every day this week, and today provides an opportunity for end-of-week profit-taking.
Therefore, we expect the S&P 500 futures to break the green trendline on the chart below, which currently comes in at 2470.50. The first lower target would be yesterday’s 2465.50 low; we see this area as a good place to cover some bearish positions. However, the ultimate target would be the 2461 area, noted by the blue line on the chart.
The prior all-time high, 2461.50, near the same blue line, is an area which once offered some short-term resistance; and we expect that on first touch, this level will offer support. Therefore, we would look to close any bearish positions here with the intention of opening bullish positions in this market.
We often note that we like to buy dips. However, next week our conviction decreases. With the month of July coming to a close, we speculate that there could be profit-taking, and if by chance a pullback to the 2450 to 2440 region should occur (shaded in gray), we would look at that as a very strong buy area.
The only item on today’s economic calendar is the Baker-Hughes Rig Count at 1:00 p.m. ET, which should not be a difference-maker in the equity index markets.