Weekly Market Recap and Outlook: S&P 500 Tests Record High With 8,000 in Reach if Yields Retreat

The S&P 500 is pressing against its record high as signs of a near-term peak in Treasury yields strengthen the case for another move higher. The opportunity is a push toward 8,000, but that still depends on stocks clearing resistance and yields following through lower. The first confirmation I’m watching is a daily close above 7,818.

In One Minute

Stocks remain bullish, but the S&P 500 has not confirmed its breakout above 7,818. Matching reversal candles on the daily and weekly yield charts point toward a possible decline to 5% or below, which could help stocks and precious metals. Gold and silver are holding important support, while oil is close to a level that could trigger a sharp decline. Bitcoin is holding above $81,000, with $87,200 marking its breakout threshold.

The Context

The market recovered quickly after the Fed’s latest rate increase and firm stance on inflation initially sent stocks lower. Taking inflation seriously can support confidence in the near term, even though I remain skeptical that the Fed will avoid returning to money creation and quantitative easing when conditions become difficult. That leaves room for a bullish stock market outlook now alongside concerns about much higher yields further down the road.

A retreat in yields could fit with better-than-expected Consumer Price Index data this week and potentially weaker oil prices. It also supports the possibility of only one more Fed rate increase before year-end, probably in December, if another increase happens at all. December is still far enough away for jobs reports, inflation figures, economic data, and earnings to change that outlook.

Key Developments

S&P 500 (SPX)

The S&P 500 has maintained its bullish structure above its key support line. After the Fed announcement, it briefly closed below that line, but the following session opened back above it, and the market continued grinding higher. The chart also shows a neutral zone below that horizontal support, with a lower rising trend line separating that zone from a bearish structure.

The immediate ceiling is 7,818, the August 13 record high. Last Tuesday, the index pierced that level but closed on the line, then pulled back slightly. Friday brought another test, but the close remained below resistance, so the breakout is still unconfirmed.

A daily close above 7,818 would open the way toward 8,000, potentially within the next week if yields cooperate. That target follows a rising trend line, meaning the objective moves higher the longer the advance takes. Along that line, the target reaches roughly 8,025 by August 22.

10 Year Yield (US10Y)

The yield chart is giving me a strong reason to expect a near-term pullback toward 5% or below. Wednesday’s daily candle formed a long upper wick at a high not seen in more than 20 years. Yields moved sharply higher during the session, then surrendered much of that move before the close.

For this reversal pattern, the high must cover at least 52 weeks, and the upper wick must exceed 50% of the candle’s full range. The close must sit within the bottom 25%, with the candle’s body accounting for less than 25% of the range. Wednesday’s candle met those conditions.

The weekly candle also formed a long upper wick exceeding 50% of its range, with the close in the bottom 25%. Its high surpassed the 2007 peak and reached territory last seen in 2002, representing a 24-year high. Having the daily and weekly reversal signals occur together puts the near-term downside probability above 80% in this technical setup.

That points to a possible decline lasting weeks to a few months, rather than a permanent peak in yields. Widespread confidence that yields will keep climbing adds to the case for watching for a reversal. Further down the road, I still expect yields to move much higher.

TLT

The bond side of this view is bullish, with a small TLT position expressing that outlook. TLT provides exposure to longer maturity Treasury bonds, whose prices benefit when the relevant yields decline. The position fits the near-term pullback in yields, while the longer-term expectation for higher yields remains intact.

Gold (XAUUSD)

Gold has recovered above its rising support line, keeping the near-term outlook tilted upward. It closed below that line for one session during the week, but the break never confirmed. That distinction matters because a temporary dip below support is different from a sustained breakdown.

As long as that line holds, I favor upside, with falling yields offering additional support. A confirmed break below it would change my outlook to bearish. If gold rallies, the descending trend line connecting the record high with the later major rebound high becomes important resistance, but there is no firm upside price target here.

Silver (XAGUSD)

Silver is following a similar pattern around rising support. It closed below the line on Thursday, then recovered above it on Friday, preserving the case for higher prices while support holds. If it loses that line and confirms the breakdown, the downside levels are $55 and then potentially $50.

Oil (USOIL)

Oil is still holding support around $88.75 to $88.85, where horizontal support meets a rising trend line. It moved below support during parts of a couple of sessions but never closed below it. Those intraday breaks have not triggered the larger downside setup.

A daily close below that area would represent a significant structural break and could send oil toward the longer trend line near $78 a barrel. That decline could happen quickly, within days or roughly a week. A sustained drop in Treasury yields would also be harder to square with sharply rising oil, which keeps a possible breakdown in focus for the coming week.

Digital Assets and Crypto

Bitcoin (BTCUSD)

Bitcoin’s sharp selloff on Thursday briefly pierced $81,000, but buyers recovered that level before the close. That defense kept its bullish structure alive, and price is now holding above support. The two boundaries remain $81,000 for a breakdown and $87,200 for a breakout.

What matters next is the shape of this consolidation. A slow sideways or upward drift after the sharp decline could develop into a bear flag, meaning the recovery is only a pause before another move lower. A stronger surge back upward would instead favor the bullish outlook, with $87,200 marking the breakout threshold.

Bitcoin remains in a tight range as earnings season begins and inflation data approach. Holding $81,000 preserves the support buyers defended during the selloff, while losing it would weaken the setup. Until price resolves that range, I’m watching the structure rather than assuming which direction wins.

Why It Matters

The main relationship is between yields and the assets trying to move higher. A retreat in yields could give stocks enough support to clear resistance and help gold recover while it holds its trend line. Oil matters within that same picture because sharply higher prices would be difficult to reconcile with the expected decline in yields.

Key Details

Bull Case

The bullish stock setup strengthens if yields turn lower and the S&P 500 closes above 7,818. Falling yields also support the bond outlook and could help gold, while gold and silver retain their upward bias as long as their support lines hold. Bitcoin’s bullish case depends on preserving its defended structure and producing a stronger recovery toward its breakout level.

Bear Case

Gold turns bearish if its support break confirms, while silver faces $55 and potentially $50 if its own support fails. Oil has a separate downside setup, with a close below $88.75 to $88.85 opening the path toward $78. Bitcoin remains vulnerable if its consolidation develops into a bear flag or it loses $81,000, and stocks still need to prove they can clear resistance.

What to Watch Next

This week brings the expected Consumer Price Index release and earnings from Goldman Sachs, Bank of America, JPMorgan, and Citigroup. ASML reports later in the week, providing an early look at conditions affecting semiconductors and the artificial intelligence trade. Over the following months, jobs reports, Consumer Price Index figures, Personal Consumption Expenditures inflation data, broader economic releases, and earnings will shape the outlook for another Fed increase.

Bottom Line

The clearest opportunity is a yield pullback helping the S&P 500 clear 7,818 and move toward 8,000. Gold and silver still need to hold support, oil needs a closing breakdown to activate its downside target, and Bitcoin remains inside its key range. Let the closing prices confirm the move before treating the next target as a done deal.