with the early July breakout and hitting 3000, the S&P has reached the lower end of our 3000/3050 summer target projection. Over the recent weeks, we have in general seen an increasing number of divergences in our indicator setup, since the early July breakout was very low in momentum.
In the daily and weekly momentum, we have larger divergences forming, which alone is usually toppish and a leading indicator for important tactical tops. In the index, we have a higher low forming, which is worrying since this is usually a trading setup for a more important top. More importantly, with last week’s pullback, the NYSE moved into negative territory, which triggered a fresh Hindenburg Signal. Consequently, if we do not get a new momentum impulse in the US market and do not see the start of a new major sector rotation, it will be very difficult for the S&P to hold its current price levels. On the contrary, defensives and technology were the clear leader of the June/July rally. In both defensive and technology, we see more and more reversals or lower highs forming and where particularly in the internet sector key stocks are losing momentum.