Summary:

  • The S&P 500 (SPX) rose 18 points last week to 3013, an increase of 0.6%.
  • Our projection is for the S&P 500 to chop around this week, and then move lower as the current short-term market cycle moves in to a small corrective period.

The stock market continued its upward drive last week, as investors remained jubilant about a new round of easing by the Federal Reserve, as I pointed out in the latest Market Week show.

During the previous week, “good news was bad news,” as hopes rate cut were dashed by strong payroll data. But Fed Chair Jerome Powell flipped this around in his testimony to Congress. He continued to voice concerns about weakness in the world economy and trade relations, ultimately hinting at the possibility of new rate cuts.

S&P 500 (SPX) Daily Chart 

Our approach to technical analysis uses market cycles to project price action. Our analysis of the S&P 500 is for choppy price action that may rise as high as 3032 but is likely to slip lower with the dominant larger cycle. Our short term support zone is between 2950 and 2971.

Let’s also take a look at an individual stock that moved significantly last week. Cigna (CI) rose by 9.6% to over $179. This occurred after the Trump administration let go of its plan to cancel rebates related to Medicare and Medicaid.

Cigna (CI) Stock Weekly Chart 

Based on its market cycles, CI is either still in the rising phase of its current minor cycle, or has already started the rising phase of its next minor cycle. In either case, the stock is now in a Fibonacci resistance zone. Having just made a new low in April, and showing weak technical patterns, we are not optimistic about the intermediate-term future of Cigna or the HMO group.

For a more detailed analysis of both of these charts, check out the latest episode of the askSlim Market Week show.