Sentiment gradually starting to lift; Equity indices likely to consolidate starting mid-next week

Wishing everyone a safe and happy Independence Day Holiday! 

Short-term trends remain bullish, and daily momentum gauges have hit overbought levels while DeMark exhaustion could materialize as of mid-next week for SPY and QQQ. It’s bullish to see the degree of broad-based expansion in sector participation following a push to new all-time highs for SPX and QQQ, and DJIA and RSP could join in reaching new highs as of next week. Bond yields have started to lift this past week on better than expected Economic data, coupled with fiscal uncertainty, while precious metals have started to strengthen as Silver gains ground on Gold.  My analysis points to a possible period of consolidation starting next Tuesday-Thursday, which should prove minor and short-lived, with key dates for trend change (similar to June) found near July expiration. However, July is expected to turn in positive results as bullish seasonality argues for a sharp rally into August before any meaningful consolidation gets underway. Overall, this past week’s technical situation remains in great shape and improving for US Equity indices. Sentiment is the one area to keep an eye on, as investors seem to be gradually starting to climb on board and chase this rally following a 30% SPX rally off the 4/7 lows.

As discussed earlier this week, it’s important to reiterate these themes for emphasis: 

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