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S&P 500 HITS FRESH HIGHS AS MOMENTUM BUILDS, BREADTH LAGS

The S&P 500 is still in rally mode. It closed Thursday at 7,563.63 -- its 21st record finish of the year -- and futures are pointing modestly higher again Friday, up around 0.1%, as markets wait for clarity on reports of a U.S.-Iran deal. That suggests the index could extend its run right out of the open.

And what a run it’s been. The S&P is on pace for a ninth straight week of gains -- something last achieved in December 2023. To find longer streaks, you have to go back to 1985, when it rallied for 12 consecutive weeks, and then 1957, when it notched its record 13-week run of gains. Over the recent stretch, the index is on track to climb nearly 19%, marking its strongest nine-week advance since the sharp rebound in mid-2020 following the pandemic lows.

Still, there are some cracks beneath the surface. While the S&P keeps pushing to fresh highs, its advance-decline line -- which tracks how many stocks are rising versus falling -- hasn’t confirmed the move. It peaked on April 20 and hasn’t made a new high since. That divergence suggests fewer stocks are driving the rally, pointing to some weakening in overall breadth.

That said, the S&P 500's trend remains firmly higher. Traders are closely watching weekly Gann lines -- tools that map relationships between price and time to identify potential support, resistance, and turning points.

On the upside, the next Gann resistance levels come in around 7,780 and then near 8,000. That 8,000 area is especially notable, aligning with a longer-term projection -- specifically, 12 times the March 2009 intraday low, which comes in at 8,001.48.

On the downside, a key level to watch sits around 7,350. This was a Gann resistance line that capped gains since late 2024, but after the recent breakout, it’s now acting as support. Notably, it aligned almost perfectly last week with 11 times the March 2009 intraday low at 7,334.69 -- just above the index’s low of 7,333.68 before it surged to new highs.

If that zone breaks on a weekly closing basis, it could open the door to a deeper pullback toward 7,000. For now, though, the bulls remain in control.

(Terence Gabriel)

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