The S&P 500, NDX, Mid-Cap (MDY), and Dow Transports are between a tight support and resistance zone. Momentum has started to turn up, but we need to see a close above the indicated resistance areas to say we are clear for a move higher.

The bullish setup in the energy complex of WTI, Heating Oil, Nat Gas, and RBOB has big implications for energy stocks from here into year-end and potentially more.

We are likely in a spot for a tactical low as the S&P is just shy of an MFU-4 target level of 4290.

The pullback held above the 50-day and lower end of the channel.

The S&P 500 is pulling back towards its rising 50-day average and potentially towards its regression trend channel. We have an ellipse turning point indicator at the lower end of the channel about –1.75% from here.

Price is into trendline resistance off the recent 2-month highs. The risk/reward looks good here to short on a break of 15333 with potential downside to 15180. We are not looking for a significant decline from here. Just a move to the tops of early August.

The pullback in both the S&P 500 and NDX held at their respective 50-day averages and triggered ellipse buy signals. Both indices are now above recent MOB bands where the declines started from, and this is bullish.

The pullback on Thursday undercut both the 200-day avg. and the MOB band as shown on the chart below. On Friday, the index recovered both indicators, and we have follow-through tonight.

Both the S&P 500 and NDX are into an area of resistance accompanied by momentum divergence. This continues to be a place to not get aggressive on the long side.

Amazingly, the S&P 500, NDX, Russell 2000 Mid-Cap (MDY), and the Dow Transports are all into resistance zones with momentum divergence in most cases. This is an important area to look for either a change in trend or a push higher for continued strength.

We put on a short in both the S&P 500 and NDX last week as both reversed at MOB target bands and broke below their short-term uptrends.

A number of indices had a good 4% to 6% rally off the MOB and Ellipse support areas outlined last week.

The S&P 500 has pulled back to a support area identified by an ellipse turning point indicator and the 50-day average. This is an area to expect a short-term rally.

The S&P 500 reversed quickly last week from its short-term pullback. Upside momentum remains favorable.

The S&P 500 has been hovering around the MFU-3 target area of 4225 since late April and just recently successfully tested its 50-day average and triggered an ellipse buy. A weekly close above the most recent high would be positive and will likely lead to the next leg higher. On page 3, we show the weekly chart of the S&P, which remains well contained within its regression trend channel.