However, traders should always be aware that 3rd Monthly 50% level rejection patterns can often extend downward towards the following monthly lows in the next Quarter.
Previous Weekly report
S&P Weekly cycles
As noted in the Previous Weekly report, the June lows @ 1259 will try and support the market, whilst the June 50% level rejection pattern will try and push the trend lower towards the July lows.
Therefore, next week could remain within the Weekly levels once again, and swing as high as the Weekly highs....
or it's going to break support and continue to trend lower, as shown in the next chart.
S&P Monthly and Secondary cycles
S&P is currently being supported at the 2nd Quarterly levels, which will shift at the start of July.
Therefore, there is enough reason why the S&P could rise upwards in the last week of the 2nd Quarter.
However, with QE2 ending and no sign of QE3 starting, the S&P could also follow the 3rd monthly rejection pattern towards the July lows.
In conclusion:- if the S&P rises upwards, then the 3rd Quarterly high around 1325 will probably form resistance and push the market lower once again.
If it's trading below current support and the 3rd quarterly 50% level, it's likely to continue down towards 1208.50.
The 3rd Quarter looks to be more sideways range trading with a downward bias.
