Despite an endless parade of anxiety-provoking headlines about trade talks and the global economy—is it slowing?—the technical background for the S&P 500 index continues to track my expectations

I believe oversold lows will likely develop fairly soon at important technical support near 2800 on the S&P 500. Action in the short-term 14-day relative strength index (RSI) momentum indicator, which is helpful in timing 2-3-week swings in the market, backs up my expectations for an oversold rebound from current levels.

You’ll note in the bottom panel of the chart below that the daily RSI is bottoming near oversold levels as the S&P 500 retests its May 13th lows at the blue support band. Look for a bounce into month-end followed by an ongoing zig-zag pattern through the summer and into the third quarter, as is illustrated by the red and blue arrows below.

What to do? Investors should remain patient, prepared, and watchful, with an eye to increasing equity exposure into further uncertainty in early Q3. Keep the powder dry.

So steady as she goes folks, but be ready to engage.

The S&P 500 index (daily)

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Here are my noteworthy leaders and laggards for the week.

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