After a strong closeout for the first half year, the Ndx closed for the best performance for the first half year in history. SPX also had a pretty strong closure point at 4458.48 where very close to the strong resistance area 4460-4495.
From last week's prediction, the market was supposed to do a three waves pullback. However, it only finished the first pullback wave and touch the 4325-4350 then bounce back to new highs, where looks like the market wants to react like M top(even though the market breaks a new high Without big volume, it might be a fake one)
There are two ways that the market will react in the next following weeks:
1. we will have strong ADP and non-farm payroll data, which will boost market to price in the best-earning seasons in the past three years, and push the SPX to 4500 ish, and following the earnings data comes out, investors will return to reality and the market will give a big correction starting from the end of July.
2. we will have a consolidation area between 4300-4460, which means the market will up and down in this range for the next 2-3 weeks until the big tech earnings, then give us a real direction. 4600 for upside target level, 4096 for downside target level.
How to play?
If the market cannot break 4460 within this week, then I would short the market until at least 4325. If the market breaks 4460 within this week, I would buy a long position for a short-term play, because we are in a short week, no need to rush into the market, let the market move first, especially we will have FOMC min on Wed, ADP on Thurs, and Non-farm payroll on Friday, so I believe the market will give us some directional hint followed by the data.