The S&P 500 recaptured 1100 on Friday. This is a positive short-term development.
Prior to last week’s rally, the S&P 500 was in jeopardy of violating the long-term uptrend. In early July, the S&P 500’s 50-day moving average crossed below its 200-day moving average. This is known as the death cross. The crossing of the two moving averages is a bearish signal and often predicts further market declines.
Thankfully, earnings season kicked off with a slew of strong earnings reports. The market rebounded and is within striking distance of the 50-day moving average, crossing back above the 200-day moving average.
This is a positive technical signal and should provide a continuation of the uptrend into the 1130 – 1150 price area.
