Chart of the Day - Friday, May 26, 2023

What comes next for the S&P500? Are we finally breaking above $420... ?

My best guess is a breadth expansion with broader participation while the mega cap names take a back seat over the coming weeks.

How do you see it?$SPX $SPY pic.twitter.com/yAiCpgTkmb

— Sam McCallum (@Honeystocks1) May 26, 2023

Today's Chart of the Day was shared by Sam McCallum (@HoneyStocks1). The S&P 500 gained just +0.32% this week, but it finally closed above the notorious 4200 level, marking a fresh nine-month high. Bulls need to see this level start acting as support in the near term. If it does, the next major upside objective will be the August highs, around 4300. Breadth continues to be unimpressive, with only 44% of S&P 500 components above their 200-DMA (as of Friday's close). Typically you want to see >50% to confirm a bullish phase. As Sam explains, it would be constructive to see rotation and broader participation at this point.