The Standard & Poor’s 500 index (SPX) pushed past the widely watched 200-day moving average near 3000 last week, as we headed into May’s month-end. A short-term negative divergence has been developing over the past two weeks with VIX not falling below the May 12 lows at 26 while the SPX has made new recovery highs.

Another short-term pullback in early June would not be a surprise but overall, the technical behavior remains positive. I continue to expect weakness to relatively shallow and short lived. For traders focused on levels, first support is at the 15-day moving average at 2940 followed by the now rising 50-day moving average at 2772 with resistance at the March bounce highs at 3136.

For longer-term investors, the more important technical developments are twofold. First, at the market level, the SPX recaptured its rising 200-week moving average in April and the 15-month moving average in May. These are noteworthy milestones given, the 200-week simple moving average has proven to be a good proxy for the underlying trend in secular bull markets, while the 15-month sma has represented the trend for markets over a 2-4 year market cycle.

In fact, the 4-year cycle analysis that I use to track multi-year bull cycles, suggests the lows in March likely marked the ...

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