The $SPX chart remains bearish. There is support at 2825. There is probably stronger support at 2720-2730, the area of the March and May lows. As for resistance, the major resistance area remains 2940-2950, which is not only the recent tops, but is also the psychological resistance caused by the fact that the July 2019 activity look like a false upside breakout to new all-time highs.
The equity-only put-call ratios remain on sell signals (Figures 2 and 3).
The market took a nasty turn downward at the beginning of the week, violating support levels. But that created oversold conditions, and a strong overold rally has followed.
Chart-wise, there is resistance at 2950 and 2980. There is a new support level, at about 2825 (this week's lows), and then below that at 2720-2730, the March and May lows.
Everyone was worried about the FOMC announcement this week, but it turned out to be benign. But, on Thursday President Trump tweeted that there would be more Chinese tariffs. Whether the market over-reacted to this tweet or whether there were just a lot of traders looking to lighten up, a torrent of selling was unleashed.
Stocks made new all-time highs again this week, overcoming some negativity from a few areas. That negativity remains, but the $SPX chart itself is strong, and so are the NASDAQ Composite and the NASDAQ-100 ($NDX; QQQ).
Early in the week, $SPX pulled back for a couple of days, making daily lows just above 2970. That is the first support area. Just below that is another support area, at 2950-2960.
After an impressive month-and-a-half rally from the beginning of June to mid-July, it looks like a correction might finally be at hand. There is support at 2950-2960 and 2890-2910.
The equity-only put-call ratios are still on buy signals, according to the computer analysis programs that we use to track these charts.
Market breadth has weakened a bit, and both breadth oscillators have rolled over to sell signals as of the close of trading on July 17th.
New all-time highs were registered this week by the S&P 500 ($SPX), Dow ($DJX), NASDAQ Composite, and NASDAQ-100 ($NDX; QQQ). However, it is not necessarily a good thing when the large caps are leading the rally, but that's what's happening now.
The S&P 500 Index ($SPX) has made new all-time closing highs on the last three days. Other indices are following most notably the Dow ($DJX) and NASDAQ (QQQ and Composite).
There is support on the $SPX chart at the old highs (2940- 2950) and below that, where there was more work done, at 2890- 2910.
The equity-only put-call ratios remain strong and on buy signals, as those ratios continue to drop rapidly.
$SPX pulled back this week, partly because the market was overbought and also because the week after June expiration is a seasonally weak week. So far, it's just a normal pullback, with support at 2890-2900.
Equity-only put-call ratios remain strongly on buy signals. Their downward trajectory was not even fazed this week, as they held steady to their buy signals even while $SPX corrected a bit.
The stock market ($SPX) is opening at new all-time highs this morning, fueled by a very euphoric response to perceived rate cuts coming in both Europe and the U.S. That doesn’t seem like a recipe for long-term market success, but we are concerned with how the indicators look, rather than trying to predict what a small group of central bankers might do.
The main thing to keep in mind is that $SPX has not broken down below support at 2800. It was tested -- more or less -- once again yesterday and has held so far. A close below 2800 would be very negative from the viewpoint of the $SPX chart.
Overheard, the major resistance on the $SPX chart is the double top at the all-time highs. More than one bear market has started from a similar pattern.