S&P bulls return in the game; still some work to doLast week, buyers regained control on the daily timeframe, filling the gap from Monday, August 5th, and closing the week at the high. While this was a strong display of power, I would approach it with caution for the following reasons:
1. The market is currently in a weekly consolidation phase. We've already seen how strongly the bears defend their control on the weekly timeframe (as evidenced by the last week of July), so this should not be disregarded.
2. The magnitude of Wednesday’s bearish candle demonstrates how easily the bears can move the price when they feel weakness
3. While all major sectors closed week green, none has managed to close above previous week high. Most of them are in a weekly consolidation, which signifies genuine market weakness.
To sum it up, while it's highly likely that the bulls will be able to confirm a weekly low ( 510.3 ) in the next days, it's uncertain whether they will be able to maintain their position for long. I would definitely wait to see the week’s close before considering a “buy.” Ideally, the bulls should fill the gap from Friday, August 2nd, and establish some value above 534 . If this doesn't happen and we see a strong price rejection, it would confirm bearish control.
The upcoming week is packed with economic data, which could fuel momentum for either side.
