S amp P 500 rebound continues amid strong earnings season

Within the context of the long-term bullish trend going back more than six years, the S&P 500 index (daily chart shown below) has made a sharp rebound from key support around the 2035 level within the past two weeks to begin re-approaching its all-time high of 2134 that was hit this past May.

This rebound follows a volatile pullback in the latter part of June and early July that was triggered in part by the Greek debt crisis and sharp plunges in China’s equity markets. This severe volatility prompted a plunge from near the noted all time-high to break down below both the 50-day and 200-day moving averages and then drop further to establish a three-month low by early July.

After market perceptions of risk regarding the Greek financial/political situation and China’s stock meltdown began to subside, the S&P 500 found its base around the noted 2035 support level, which was last tested as support in March and April.

From there, the resulting rebound has pushed the index back above its 200-day and 50-day moving averages once again. With what looks to be a strong earnings season underway in the US, the clear upside target on continued bullish momentum is around the noted 2134 record high.

From a longer-term technical perspective, any further move above that high, in uncharted territory, could begin to target further upside around the 2200 level, which is near the 161.8% Fibonacci extension of the most recent pullback.

Downside support on any subsequent pullback resides around the key 2070 level, followed by the noted 2035-area base.