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Trend has improved with Wednesday’s breakout; Expecting SPX rally above 4200 is underway with Wednesday’s gains

Wednesday’s range breakout seems to be occurring directly on signs of the Debt ceiling negotiation showing progress in recent days.  While no official agreement is yet in place, both parties seem intent on reaching a deal in the days to come.

7 of 11 sectors finished higher than 1% on the day in Equal-weighted terms; However, it was the rebound in both Regional banks and Technology that stood out as most important following recent selling pressure.

Consumer Discretionary trends vs. Consumer Staples have broken out and are starting to turn higher both on a Cap-weighted and also Equal-weighted basis.

NIKKEI exceeded 30k for the first time in over two years.  Meanwhile, appetite for Chinese equities seems to be losing enthusiasm given the lack of any meaningful catalysts or inflows.  However, Chinese Growth seems to be advancing vs. Value for the first time in nearly two months given Technology gains.

Overall, the mid-May cycle in SPX which was thought to start between 5/17 and 5/24 very well could have kicked off a meaningful rally on Wednesday given the widespread evidence of breakouts among n...

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