The main U.S. stock market indexes gained 0.5-0.7% on Tuesday as investors hoped for the continuation of a secular bull market. The S&P500 index closed slightly above 1,650 and yesterday’s daily high (1,654.18) aligned with the level of the June 18 local top, only 2% below the May 22 all-time high. The ongoing quarterly earnings releases still seem to have the greatest positive impact on market sentiment. Technically, the S&P500 index penetrated its previously broken November-May upward trend line, rising further above the May-June correction’s retracement levels, which is a positive sign, although some sort of consolidation scenario still cannot be excluded, as we can see on the daily chart:

Expectations before the opening of today’s session are rather neutral, as the European stock markets retreated 0.3-0.6% in response to worse than expected economic announcements from China. The S&P500 futures contract (CFD) tests the resistance zone at 1,640-1,650, marked by the early June consolidation’s upper boundary. In the short term we see some uncertainty and the market may correct its recent move up. Potential support is at 1,600-1,615, where the price fluctuated in early July, as the 15-minute chart shows:

Thank you,
Paul Rejczak