July 14, 2023
US equities are mixed with the S&P 500 (SPX) on track for a +2.7% weekly gain. The equal weight S&P 500 (RSP) and Russell 2000 (RTY) are lower after several days of outperformance.
The focus has already shifted from disinflation to Q2 earnings season. The S&P 500 (SPX) is now overbought and ‘better than feared’ results are unlikely to push the index through technical resistance at 4565. We look for the SPX to consolidate gains over the next two weeks. Bullish trend dynamics remain in place if the index can maintain closing levels above ~4280. Near-term risk/reward is now unfavorable given that technical resistance is just 1% above current levels and support is 5% lower.