Consumer Discretionary breakout, but can this last?

Near-term and intermediate-term technical trends remain bullish for US Equities, but it’s thought that the rally in US Stocks likely will face some meaningful resistance at marginally higher levels, which might begin sometime between now and August Expiration. SPX has now officially joined QQQ at new all-time highs, and might scale up to 6550 before making some kind of peak near resistance. Perhaps more importantly, the Dow Jones US Total Stock Market index (Measuring all US Equity securities with readily available prices) also pushed back to new all-time highs as of today. Overall, despite some of the minor concerns regarding Elliott-wave patterns nearing completion, seasonal/cyclical periods of weakness approaching and waning breadth, it’s going to be necessary to see evidence of US Equity index prices turning down in a manner that would help to add conviction to these concerns. At present, today’s new all-time high in SPX likely can help to carry prices even higher, while NVDA looks ready to exceed its triangle consolidation, which was exceeded today by $META. Overall, while it’s proper not to grow too complacent in August, it’s also proper to let this rally run its course until the market demonstrates evidence of starting to weaken.

As this chart shows below, $SPX has just exceeded the former late July peaks in $SPX, and could have little to no resistance until around 6550.

Tuesday brought about some above-average strength in Small and mid-Caps, but it proved to be Technology which roared back to “save the day”, again. Seven Equal-weighted $SPX sectors out of 11 were higher today by more than 1%, with three sectors eclipsing 2% in performance.  Market breadth rebounded sharply and finished over 4/1 bullish.  Thus, while I’ve been complaining about market breadth in recent weeks for good reason, this week has actually helped this to make some incremental progress higher.

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