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We remain long SPY for bucket 2 with an S&P 500 equivalent target near 1386. Stops are at 1345, which was yesterday’s low and the halfway point of Friday’s rally.
We think upside is the path of least resistance for the coming days because:
- Summer lull tape is tough to short
- Options expiration week tends to move the tape up
- Earnings season good so far
- Beyond a few days and possibly a few weeks here we still see much negative divergence in leading sectors and parts of the market such as Asia, semiconductors, defensive stocks outperforming still…and more