Critical Bounce on S&P 500 Indicates Potential for New Highs
23 July 2024
Yesterday was a pivotal session for indices, notably for the S&P 500, where we observed a significant reversal. This bounce did not occur randomly; it took place precisely on a long-term uptrend line connecting higher lows since April, marked with an "S" and illustrated in orange. Additionally, we witnessed a false breakout below a blue horizontal support, highlighted with a red rectangle. Such false breakouts often signal strong movements in the opposite direction, in this case, upward.
The defense of both the blue support and the orange uptrend line underscores a robust bullish movement. Given these technical cues, my outlook on the S&P 500 remains optimistic. I anticipate that we might see new long-term highs in the near future, supported by the solid recovery from key support levels.
With the market defending critical support zones and rejecting bearish attempts, the stage appears set for further upward momentum. This setup suggests that the recent lows could provide a strong foundation for the next leg up, reinforcing the bullish sentiment in the market.