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.

The XOP was shy of its $112 target is stalling at a MOB band, Momentum is weakening, so we are taking profit here and will evaluate a pullback to buy into. We got stopped out of our July WTI Crude Oil short at $103 but remain short RBOB with a target of $2122.

We continue to like both gold and silver futures, and will be looking to add to our long position. Both futures contracts look poised to breaking out very soon. We are putting both GDXJ and RGLD in our pairs model with an offset in SPY for tracking purposes.

Reviewing the components of the XHB and building related names, we see this area under distribution. We have been short LEN, MTH, and KBH and now adding the basket trade with the XHB. The initial target is $70.

The reversals we talked about in our last report on May 25 now have a few indices, such as the NDX and Russell 2000 breaking out above important resistance zones.

Both commodities are at or very close to their Make or Break (MOB) targets with momentum divergence. We are taking a short trade here with a stop just above the MOB band.

 For our pairs trading portfolio we closed out our long position in XOP, XLE, PXD and DVN on May 11 when the XOP entered the pause phase. We are back long and maintaining our longer term bullish view in the sector. For our pairs model we will be adding back the following longs in this sector with an offsetting hedge in the SPY. These are good stand alone longs for long-only managers. Long: XOP, OIH, OXY, SLB, SU, FANG, EOG, and PXD

Most of what we talked about last week remains the same. Here we wanted to highlight a possible positive shift taking place in the Russell 2000. We will have more to say once the upside level gets triggered from the chart view below.

The July Silver futures signaled a buy two days ago at the purple diamond below, and today it was a triggered long with price moving above $28. We would be buyers here with an initial target at $29.365. We also get a MOB target at $31.

We got very good reversals last week in the market averages we cover for this report, and we now are seeing momentum indicators starting to hook up from being oversold.

The S&P 500, Russell 2000, and the Mid-Cap (MDY) pullback to our target zones highlighted in recent reports. This may be all we get for a pause/pullback phase.

The monthly chart of the XAU jumped out to us as it displays a very bullish "cup with handle" pattern. The upside implications of the pattern measures an upside target of +32% from here. We highlight gold, silver, GDX, and ten long equities that we like in this group.

After pulling back from the MFU-2 area on May 10, the GDX is now above it, which is bullish.