The 3,000 level has held for the S&P 500 and the market remains in neutral, but Frank Cappelleri believes a resolution, one way or the other, will come in July.
Cappelleri notes that the 3,000 level has proven to be a very strong support zone over the last few weeks (Chart 1). While he says either side can make a good case about what June’s pause will mean going forward, the earnings season will soon bring fresh data upon which the index can break out of its triangle pattern (Chart 2). With the triangle formation getting tighter by the day, Cappelleri says it will need to be resolved in July. Until then, the same technical patterns remain important, i.e. the long-term bull trend but alongside the possibility that a bearish head-and-shoulders pattern will confirm (Chart 3).