The pullback held. The S&P 500 fell to 7,294 two weeks ago and buyers stepped in. Last week it climbed the whole way and closed at 7,483.
That is a gain of about 129 points, or 1.7 percent. The support zone we flagged did its job. The dip did not deepen. It turned.
Now the market sits just below one line. A close above 7,581 confirms the low is in and opens the path to the summer target near 8,000. Everything this week runs through that level.
Last week we named 7,237 to 7,259 as the support zone that decides summer. Hold it, and the rally sets up. The index held. It never even reached the zone. It bottomed at 7,294 and turned straight up.
We also said a reclaim of 4,150 would flip gold back up. Gold reclaimed 4,150 and ran to 4,208. Both calls tracked the levels. The euro tagged the 1.147 hurdle we named, then faded. The week followed the map.
The dip turned, but the job is not done. The S&P 500 rallied hard off its low. The number of stocks joining the move pushed back to new highs. That is a healthy sign under the surface.
The hold-back is the dollar. A strong dollar and a Fed still leaning toward higher rates cap stocks and pressure the euro. Large hedgers are also still betting against the market. That is a reason to keep risk modest until the bounce clears its gate.
So the setup is constructive but unconfirmed. The trend underneath still points higher into late summer. The near-term move needs one more push to lock it in.
Start with the upside. The line to reclaim is 7,581. A close above it signals the low is in and momentum has turned. Above that, the path opens to 7,717, then 7,844, then the summer target near 8,000.
Now support. The first floor is 7,449, last week's pullback low. Below that, 7,294 is the low that held. A daily close under 7,294 would reopen the deeper support zone at 7,238 to 7,186. The line that changes the whole picture is 7,147. A close below it breaks the structure that has held since spring.
Gold already made its move. It reclaimed 4,151 and ran to 4,208, closing the week at 4,187. That reclaim flipped gold bullish. The next targets are 4,268, then 4,377. A daily close back below 4,046 would cancel the move.
The euro is stuck. 1.147 is the hurdle it keeps failing. 1.137 is the floor. Below 1.137, the path stays lower while the dollar holds firm.
The chart is already set up for the bounce to continue. Geopolitics is what gives the market permission to follow through. The story this week is trade. A batch of tariffs snaps back to higher rates on July 9 unless the deadline is extended. An extension calms the market and helps the bounce. A lapse would feed the dollar and stall it.
Watch the dollar most closely. It is strong, and that is the headwind for stocks and the euro. Any sign the dollar run is stalling would be the first hint the S&P 500 is clear to push through 7,581.
Two events could force the issue this week. The first is the release of the notes from the Fed's June meeting, due midweek. At that meeting the Fed held rates steady but raised its outlook for inflation and signaled at least one hike is still on the table this year. The notes will show how firm that stance is. A hawkish read strengthens the dollar and caps stocks.
The second is the July 9 tariff deadline. Here is the if-then. An extension plus soft language from the Fed would ease the dollar, let the S&P 500 clear 7,581, and extend gold's run. A tariff snap-back plus a hawkish Fed would push the dollar higher, press the euro below 1.137, and stall the stock bounce under its gate. The events decide which way the week breaks.
Scenario A. The bounce confirms. The S&P 500 clears 7,581 on a closing basis. Buyers step in on any dip that holds 7,449. The path opens to 7,717, then 7,844, then the summer target near 8,000. This is the path the bigger trend favors, with a typical window for the high in the second half of July into mid-August.
Scenario B. The bounce stalls. The dollar strengthens and the S&P 500 fails at 7,581 again. A daily close below 7,294 reopens the 7,238 to 7,186 support zone. A close under 7,147 would signal the correction has more room and shift focus to a deeper low later in the year. Even then, this reads as a countertrend move inside a larger uptrend.
One caution sits under both paths. The large hedgers who bet on prices are still net short. Keep risk modest until 7,581 gives way.
The setup is constructive. The levels are precise and the catalysts are on the calendar. Let price clear 7,581 to confirm it, and follow the level, not the noise.