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BULLISH REVERSAL REIGNITES S&P 500’S RUN AT RECORD HIGHS

Futures tied to the major Wall Street indexes are off to a strong start on Monday, getting a lift after Washington and Tehran reached a preliminary deal to end the Iran war and reopen the Strait of Hormuz -- a vital oil shipping route. That news has sent oil prices sliding to their lowest levels in about three months.

S&P 500 E-mini futures ESc1 are up nearly 100 points, or more than 1%, pointing to a solid jump at the opening bell.

Looking back at last week, the S&P 500 .SPX hit a rough patch when it broke below a key weekly Gann Line -- an indicator traders use to spot support and resistance -- around 7,385. The index dropped to as low as 7,237.85, but quickly turned higher, reclaimed that level, and wrapped up on Friday at 7,431.46.

After that rebound, the index is still about 2.3% below its June 2 record close of 7,609.78, and roughly 2.5% under its 7,620.90 record intraday high from the same day.

However, with that sharp turnaround and strong premarket momentum, the S&P 500 looks like it may be gearing up for another run at record highs. If it gets there, the next level to watch -- another Gann Line -- sits around 7,850 this week.

After the opening jump, initial support will be in the 7,485 to 7,465 area. For now, the bulls seem to have regained control. But there’s still a risk to keep in mind: if the S&P breaks back below 7,400, last week’s low could come back into focus, potentially opening the door for a deeper pullback toward the 7,000 level.

(Terence Gabriel)

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EARLIER ON LIVE MARKETS:

EUROPE'S DATA CENTRE BOOM HITS A POWER WALL CLICK HERE

BARCLAYS RECOMMENDS ADDING TO GOLD EXPOSURE CLICK HERE

COPPER: THE ROUTE TO $15,000/TON CLICK HERE

HORMUZ AGREEMENT DEALS A STRAIT FLUSH TO MARKETS CLICK HERE

EUROPE BEFORE THE BELL: STOCKS SET FOR BIG JUMP ON HORMUZ AGREEMENT CLICK HERE

MARKETS CELEBRATE MOU ON SOH CLICK HERE