Push back to 6100 likely for SPX

Short-term trends in US Equities remain bullish, and the minor consolidation this week in US Equity indices has not proven severe enough to cause any technical deterioration in the rally from early April lows. Overall, I remain encouraged about the technical progress and structural improvement that has occurred in SPX over the last six weeks, and feel that an upcoming move back to challenge February peaks should be forthcoming. Precious metals have begun to turn back higher, and the bond yield breakout is likely to prove short-lived into next week before yields start to reverse course and trend lower to join the US Dollar’s decline. I favor Industrials, Financials, Technology, and Utilities, while also favoring owning precious metals and Treasuries. Additionally, Emerging markets have appeal given the drop in the US Dollar and should be overweighted for further upside progress in the months ahead.

Overall, the selloff to multi-day lows got close to, but failed to exactly reach 5809 before starting to stabilize in Thursday’s session. There has been no violation of the current uptrend, and many Technology stocks look well-positioned to begin turning higher last week following minimal consolidation. 

While a larger bond market rally would help to give more confidence to the idea of a stock market push back to new highs, markets might gain conviction after $NVDA earnings next week, which could benefit Semiconductors and most of Technology in the weeks ahead.

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