Stocks indices bull theme, despite setback (S&P 500 forecast)

  • A strong end to last week and to start to this week with a surge Monday across global share indices, to try to resume the positive breakouts seen earlier in July.
  • This has been despite still rising numbers of COVID-19 cases across many US states and in pockets globally.
  • A late session sell-off on Monday was driven by worries regarding California moving back towards a lockdown, but the overall price action remains positive, pointing to higher prices, again even in the face of coronavirus concerns.
  • Earnings season kicks off in earnest this week, with JP Morgan, Citigroup and Wells Fargo all in the spotlight today.
  • Here we focus on the US benchmark stock index future, our S&P 500 forecast for today and into the second half of July.

S&P 500 day trade outlook: Risks stay higher

Day trade update and view

A Monday rally above last week’s peak at 3184.0 and 3200.0 resistance to 3226.25 just short of the 3231.25 key cycle high to build on Friday’s firm intraday bounce, to further reject last Thursday’s plunge below 3125.5/21.25 down to 3105.25, and despite a late session plunge to leave the threat to the upside for Tuesday.

Day trade setup

  • We see an upside bias for 3172.5 and 3205.5; a break here aims for 3226.25 and the 3231.25 key cycle high.
  • But below 3126.5 opens risk down to 3105.25 and possibly 3095/89, even 3062.75/56.0.

S&P 500 intermediate-term outlook

The mid-June push below 2965.5 signalled an intermediate-term shift to a broader range seen as 2923.75 to 3231.25.

  • Upside risks: Above 3231.25 sets an intermediate-term bull trend to target 3397.5 maybe 3500.0.
  • Downside risks: Below 2923.75 sets an intermediate-term bear trend to target 2760.25, 2620.75, 2424.75 and maybe 2174.0.
6 Hour S&P 500 Chart
6 Hour S&P 500 Chart

Editor in chief

Steve Miley has 29 years of financial market experience and as a seasoned expert now has many responsibilities. He is the founder, Director and Primary Analyst at The Market Chartist, the Editor-in...continued

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