First support shifts slightly to the 5870s-5850s area on the S&P 500, which bent but did not decisively break last week. Continuing to hold this support would keep the pattern bullish, with upside potential to the July-September cup and handle. The early 2022 to early 2024 big base breakout targets are into the 6,100s. The cup and handle breakout and retest zone at 5,700-5,650 offers additional support.
The S&P 500 advance-decline (A-D) line reached a new high on Friday (11/22), and the NYSE Composite stocks A-D line hit a new high yesterday (11/25). This neutralizes the mid-October to early November bearish divergences for these market breadth indicators. It also provides bullish confirmation for the new highs on the NYSE and serves as a potential leading indicator for new highs on the S&P 500, increasing the likelihood of following bullish seasonality into year-end.
Trend-wise, while the cap-weighed S&P 500 continues to float above its trendline, the chart above shows that the index is only two standard deviations above trend. At major extremes it can reach three standard deviations.
.png)