SPX Daily Chart

The blue lines show the positive divergence and falling wedge that bounced price seven days ago. Money flow, however, wanted to see price come back down to test this area again, and price did, over the last couple days.

The two red circles show tests of the 200 MA that held. The 10-month MA also held at 1268 which is Friday's closing price. The indicators look constructive for some continued buoyancy. For official positive divergence to click in for the last eight days, including tomorrow, price needs to close between 1257 and 1262. Since the blue lines already show the positive divergence that bounced price, price may not have to come down to these levels, the short term trend may already be in place and price will bounce from this 1268 area.

Monday will tell a lot but price buoyancy should occur from one of the support levels; 1268, 1262, 1258, 1252 or 1249. Losing 1249 is a whole new ball game and opens the door to 1233. Seasonality ahead of a three day holiday weekend says that Thursday and Friday should be bull-friendly days. Use this to help project broad market direction as the early week sessions play out.

Thus, the indexes should bounce moving into July but then broad market weakness should resume. The current sideways consolidation move may serve as a bear flag moving forward, thus, first leg is 1370 to 1260 or 110 points, and, say the consolidation finishes at 1307 (taking a guess), 1307-110=1197 target. But, as always, simply take things day to day and constantly fine tune your technical analysis. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here or any links connected to this information. Consult your financial advisor before making any investment decision.