SPX Daily TA Cautiously Bullish

SPX Daily bullish. Recommended ratio: 88% SPX, 12% Cash. *CRITICAL RESISTANCE WATCH. The BEA reported June PCE numbers this morning and both came in higher than last month: Core PCE (sans Food and Energy) came in at 4.8% vs 4.7% last month (also had a 4.7% consensus estimate) and PCE Index came in at 6.8% (20 year high) vs 6.3% in the previous two months. Although the move in Core PCE wasn't too significant, it's the Fed's preferred gauge of inflation which leaves the possibility of a 75bps hike in September on the table. BLS reported Q2 ECI numbers and compensation stayed relatively flat while wages/salaries increased and benefits decreased compared to Q1, this is perhaps indicative of businesses cutting perks and profit sharing in exchange for higher wages to lure in talent during an inflation induced consumer slowdown. Compensation, Wages/Salary and Benefits all went down for State and Local Government employees. The U of M Sentiment Survey came in at 51.5, a 3% gain from last month's (50); if next month's is higher, this would imply that consumers are becoming more optimistic about the worst being behind us in 2022. The Atlanta Fed posted their first GDPNow Q3 estimate and to the surprise of many they anticipate a quarter of +2.1% GDP growth. Earnings this quarter are so far proving to be resilient as well and provide additional confidence for investors going into Q3. Equities, Cryptos, Gold and Oil are up while VIX, DXY, and Treasuries are down as more investors begin to transition to risk-on with hopes that the worst is behind us. Though I still think it's premature to assume money markets have bottomed until after September, there is a lot of upside potential here compared to downside.* Price is continuing the FOMC rally and is currently trending up at $4130 as it approaches a test of $4175 resistance (which is a critical resistance). Volume remains Moderate (high) and is on track to favor buyers for a third consecutive session if it can close today in the green. Parabolic SAR flips bearish at $3862, this margin is mildly bearish at the moment. RSI is currently trending up and beginning to form a soft peak at 66 as it approaches 68.42 resistance. Stochastic remains bullish and is currently trending up at max top. MACD remains bullish and is currently breaking above 33 resistance and trending up at 42.65 with no sign of peak formation, the next resistance is at 55. ADX is currently trending up at 18 as Price is pushing higher, this is bullish. If Price is able to continue up here then it will likely test $4175 major resistance before potentially testing the upper trendline of the descending channel from November 2021 at ~$4300 as resistance. However, if Price breaks down here, it will likely test 4K psychological support before potentially retesting $3938 minor support. Mental Stop Loss: (one close below) 4k.

dailytaguy

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