There are more technical reasons to think the S&P 500 will advance than fall, according to Frank Cappelleri, Chief Market Technician at Instinet.
Cappelleri says there are two live bullish patterns (Figure 1) and two potential bullish patterns that are yet to complete (Figure 2), compared to only one potential pattern that is bearish (Figure 3).
Interestingly, despite the fact that the S&P is sporting four bullish chart patterns, Cappelleri points out that large differences are emerging between the US equity markets and the S&P appears to be the least bullish. This is illustrated by yesterday’s breadth numbers (the percentage of stocks that went up, 20 July):
S&P 500: 30%
Russell 2000: 37%
FAANG Stocks: 100%