The long-term uptrend in the S&P 500 is intact but momentum is lacking in the medium term, according to Andy Dodd, Head of Technical Research at Louis Capital Markets.
Dodd says that long-term the S&P has been making new highs and still looks bullish. However, a monthly close below 2388.50 would create a Bearish Engulfing candle on the monthly chart and neutralise his view (see Monthly Chart).
Moreover, some market indecision has been starting to show with, for example, Spinning Top candlesticks appearing on the monthly and weekly charts (see Weekly Chart). Dodd also points out that the index is trading at its upper Bollinger Band which, although not a sell signal in itself, he does not think is sustainable for a prolonged period.
Despite the above, Dodd sees no reason to be bearish just yet, albeit current levels may not offer the best entry point for new longs, especially given longer-term uptrend support is some way below at around 2322.
Read the full report, including an analysis of the following futures markets:
STOXX Europe 600
EURO STOXX 50