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Although we remain broadly bullish on risk assets, particularly technology and semiconductors, the S&P 500's sharp recovery from its April lows is showing unmistakable signs of fatigue. Several of our key technical indicators are now flipping from overbought back into correction mode, momentum breadth has narrowed dramatically, and one indicator that predicted the January top is once again issuing a warning.
We have been tracking this setup since February, when we first flagged bearish divergences at 6,851 and set a downside target of 6,143–6,207, a target the market nearly reached (missed by 2%). The question now is whether history is about to rhyme. Subscribers continue below for our full technical analysis, indicator breakdown, and what we are watching next. We also attach two chart books: 1) S&P 500 daily, weekly, and monthly charts, and 2) Global ETF + U.S. Sector ETFs + Macro ETFs.
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