SP500 – Weekly Analysis
Markets remain nervous after the weekend’s political developments. Rarely have one or two publicly shared words carried so much weight — or moved so many expectations. Sometimes, the strongest market signal is not what is said, but what should have remained unsaid.
Rhetoric aside, this weekly SPX analysis reviews the latest technical signals and outlines the short- and mid-term potential paths for the S&P 500.
CANDLES & TA
For this analysis, I reviewed dozens of candles across various SPX-tracking instruments, including ES futures. While the cash-based instruments are neutral with a slight bearish lean, the futures are neutral to slightly bullish.
Cash instruments are usually more reliable, but we cannot fully ignore the futures, which closed last and therefore reflect the most recent market developments.
A very important point is that all major time frames continue to hold key supports. If there is no significant sell-off by June 30, the monthly and larger frames will likely close with bullish candles of varying strength.
Overall, the short- and mid-term outlook remains neutral on healthy, constructive technicals. The beginning of next week will be crucial for developing and confirming short- and mid-term momentum.
Elliott Waves
At this point, the mid-term outlook remains unchanged. SPX has possibly completed, or is close to completing, wave 2 and could be preparing for wave 3.
The red alternative (2) remains on the table, but its probability has been reduced, with the new ATH in futures being one of the main reasons.
Road Map
The SPX road map remains practically unchanged, now with more data points available. Since we will never know what structure was hidden inside the recent gaps, we can only make reasonable assumptions at this point.
The latest pullback could be wave (iv) in green, or the entire wave 2 in blue. It could also be part of a larger drawdown for wave C of (2) in red. The red path remains on the table, although with reduced probability.
SP500 Sectors
The sectors are also heavily mixed. Technology and industrials are leaning bullish. Financials remain neutral, with a fair chance of a pullback. Communication is bearish, but looks exhausted. Overall, there is no clear consensus. The market feels as if it is sitting on the fence, ready to take either path.
Some of the Magnificent 7 showed signs of life on Friday, closing with moderate bullish candles and even reclaiming key support in some cases. This is encouraging, but follow-through on Monday and Tuesday is required. Once again, uncertainty remains elevated.
SUMMARY
SPX remains in a highly uncertain but technically constructive position. Short- and mid-term signals are mixed, with cash instruments leaning slightly bearish while futures are neutral to slightly bullish. Importantly, major supports continue to hold across key time frames.
The mid-term road map remains largely unchanged. SPX may have completed, or be close to completing, wave 2 and could be preparing for wave 3. The bearish red alternative remains possible, but its probability has been reduced after futures made a new ATH.
Sector signals are mixed, with no clear consensus across the market. Some of the Magnificent 7 showed encouraging signs of life on Friday, but follow-through early next week is required. Overall, SPX remains neutral on healthy technicals, with the next few sessions likely important for confirming direction.
The sector picture also quietly improved. Technology confirmed a daily bottom and returned to a bullish track, Financials formed a strong bullish continuation candle and recorded an 8/20-week EMA bullish cross, and Communication Services printed a 2D Bullish Engulfing. Only Consumer Discretionary remains bearish, while Energy is neutral; all other sectors are bullish with varying strength.
Overall, SPX is bullish short-term. The mid-term outlook is neutral for now, pending confirmation of the weekly reversal and the developing impulse off the June 11 lows.
