S&P 500: Technical indicators aligned for additional gains - BBH

The S&P 500 rose nearly 2% last week and the VIX eased a little more than a percentage point to finish at its lowest level in a month, a little below 17.5%, notes the research team at BBH. 

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“Investors drew cautious ahead of the weekend, as tensions over Syria were running high.  The technical indicators are aligned for additional gains, and the five-day moving average is poised to cross above the 20-day for the first time since March 21.”

“Although we are not convinced yet of its veracity, some see a possible head and shoulder bottom with a neckline a little below 2675.  The  S&P 500 reached 2680 before the weekend but reversed and proceeded to take out the previous day's low (~2654) before settling a bit higher 2656).  The 2678 area corresponds to a 50% retracement of the last leg down that began in the middle of March near 2802.   A move much below the 2635 area now might be seen as a failure and reinforcing the upper end of the new trading range.”