In a live market update from Monday, I broke down a key area of topside resistance for the S&P 500. The bullish action of the early U.S. session has brought this area into play. Both the DJIA and S&P 500 are up big, prompting traders to wonder if U.S. equities are ready to extend the “Trump Rally.”

The credit for today’s jump is being given to an easing of trade war tensions between the U.S. and China. Earlier, Chinese President Xi Jinping made comments promoting free trade and condemning Cold War strategies. It appears that the markets liked what they heard.

S&P 500 Technical Outlook

At press time, the S&P 500 is up 38 points and grinding higher. The result is June E-mini S&P 500 futures trading at a key area of topside resistance on the daily timeframe.

It has been a solid start to the trading week for E-mini S&P 500 futures. Price is moving higher, and buyers are throwing bids on every dip. Here are the key levels to watch for the remainder of the session:

• Resistance(1): 38% Retracement, 2649.50
• Resistance(2): 20 Day EMA, 2658.00
• Resistance(3): Bollinger MP, 2664.75

Overview: The area between 2650.00 and 2665.00 is going to be hotly contested. It is a pivotal area for intermediate-term valuations and a likely launch point for a directional move.

Given the strength of the last 18 months in U.S. equities, it is difficult to hold anything but a bullish bias. However, if price fails to eclipse 2665.00, there is a good chance that this market will retest the 2552.00 Swing Low in the near future. For now, I am on the sidelines waiting for a break above resistance or an exhaustion of short-term bullish pressure.