SP500 – Daily Analysis
I had the daily report nearly ready for release when a fresh headline hit the wire—sending index futures and several other instruments into a frenzy. It took several hours to reassess the situation and incorporate the implications. The result is the updated report below. Let’s take a closer look.
Exclusive analyses covering the S&P 500, Nasdaq, Dow Jones, Russell, and select global indices are available for our Index Focus and Ultimate members.
CANDLES
Bear Side – Bull Side
While futures have been making a strong case for a bullish continuation, it’s important to stay grounded in the technicals and examine how the cash indices closed today. All four major indices ended the session with bearish candles of varying strength, with the Russell 2000 (RUT) displaying the most pronounced weakness. Notably, both the S&P 500 and Dow Jones recorded daily MACD bearish crosses—each at record magnitude—raising red flags. The Nasdaq, however, managed to avoid a similar fate, and that may be meaningful.
Looking ahead to the monthly closures just two days away, there are strong indications that the indices are setting up for bullish monthly candles. However, the presence of extremely large bearish MACD crosses on those same monthly frames tempers the optimism and keeps the outlook in check.
From a bullish perspective, SPX has steadily built positive momentum, climbing from the daily frame through to the 15-day. Now all eyes are on the monthly candle. Barring a sharp sell-off in the final sessions, the odds favor a bullish monthly close.
The moving averages offer further insight. Nasdaq already completed its 8/20 EMA bullish cross on the weekly chart last week. SPX narrowly avoided it then, but is now on track to complete the cross—an event that typically signals the start of a sustained uptrend. Once locked in, such crosses rarely reverse in the short term and often precede multi-week or even multi-month rallies.
Technically, the current setup for Nasdaq closely resembles the post-pandemic rally that followed the 2020 correction. This time, the 50- and 100-week moving averages have remained firm, unlike the more fragile setup observed during the 2022 downturn. As it stands, the structure of Nasdaq’s rally appears fundamentally sound. Unless we witness a dramatic reversal in the next 48 hours, the monthly close will likely be bullish—potentially opening the door to new all-time highs this summer, or even for the remainder of the year.
It increasingly feels like the bear market chapter is closing. A new bullish cycle may already be underway.
S&P 500
I shared this chart earlier in May. While the green ABC path is still on the table—at least for the next two days—the blue count is gaining strength. If the current rally is confirmed, the index could be targeting the $6900–7800 range next.
SUMMARY
Over the past week, SPX and Nasdaq have delivered a mix of signals, keeping both bullish and bearish scenarios alive. While SPX built strong bullish momentum from the daily up to the 15D frames, today’s cash index closure brought bearish candles and confirmed MACD crosses on the daily for SPX and Dow Jones—at record magnitudes. Nasdaq narrowly avoided a cross, potentially signaling a different path.
Despite short-term turbulence, the longer-term picture leans constructive. SPX is now on track to complete a bullish 8/20 EMA weekly cross, joining Nasdaq, which already printed the cross last week. These events are typically sticky and rarely reversed quickly.
On the monthly frame, unless there’s a significant reversal in the next two sessions, both indices appear likely to close with bullish signals—especially Nasdaq, which remains technically robust and continues to mirror its behavior from the 2020 rally. Moving averages remain resilient, and momentum is broadly aligned.
From an Elliott Wave perspective, both the green ABC and more bullish blue counts remain valid. A confirmed rally would open targets in the $6900–7800 zone for Nasdaq.
With just two sessions left in the month, we’re nearing a key decision point. Let’s stay patient—two more days, and the market will likely reveal its true intent.
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