S&P 500 – Momentum Update – 07/22/22

On 07/22/22 the S&P 500 (SPX) hit round number resistance at 4,000 and then trended down for most of the session.  Is  this the  start of the next down wave in a bear market?  Perhaps, however short-term and long-term momentum indicators suggest there could be more upside action.

The daily SPX chart courtesy of Trading View updates  short-term momentum.

So far, daily MACD has only one line above the “zero” level and RSI is still in the neutral zone.  Daily Stochastic has a bearish  lines crossover in the overbought zone. This signal is unconfirmed by the other two momentum indicators and suggests  a decline of only a few days.

The weekly SPX chart examines  long-term momentum.

The 07/07/22 blog “Long -Term Momentum Implies a  Multi – Week Stock Rally” examined  the SPX – monthly Stochastic going  back to the 2007 to 2009 bear market  Five – months after the SPX major 2007 top, a short-term bottom occurred  followed by a nine – week rally.

The rally after the March 2008 SPX bottom resulted in  the weekly Stochastic reaching  the overbought zone.  The current SPX rally which began in June 2022 has lasted  five – weeks with a Stochastic reading of  only 40% implies  there could be more upside action. 

US stocks are seasonally bullish from July to August.  The “Bullish Breakout – 07/20/22” blog illustrated an SPX price  cluster that begins at SPX 4,080.  Long and short -term momentum indicate  there’s room for more  rally.  The weight of evidence from the time and momentum dimensions suggests the SPX rally could reach  the  zone of 4,080 to 4,220.  The time zone for a potential top is  from 08/04/22 to 08/22/22.     

Published by Mark Rivest

Independent investment advisor, trader, and writer. Articles have appeared on Technical Analysis of Stocks and Commodities , Traders.com Advantage, Futuresmag.com, and Finance Magnates.

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