Fraying at the edges - as the S&P moves above the resistance zone has a dubious character surrounding it. Now first of all; this was our forecast as far as this new trading week's intraweek rally effort, with ensuing risk later, perhaps towards the end of the week. Nothing will likely be determinate at this point, because you have a market well above support; and you have a slew of pending issues that can almost make or break things. (Include the North Korean talks and tariff issues among those concerns.) 

It should be noted that on a minimal breakout of the June S&P 2020-2040 zone (mostly of resistance for weeks) it's perfectly normal to backtrack just a bit and essentially 'test' the breakout point (the high-end of the range). It is what we'd expect is going to falter, and 'even if' the market is going to be more successful short-term. That makes it hard to make too much from at this point what is nothing but a modest daily-basis consolidation. 

At the same time, while not in the catastrophe crowd of analysts, we are at the minimum unwilling to chase expensive stocks, even as pundits literally scream for investors to step-up and buy more even after the preceding run or pauses and resumed advances. It brings smiles when some caution as regards 'correction risk', but then encourage chasing the most overvalued.

Basically it's a form of hand-holding that's going on, and rationalizing really any and all issues from a never-sell / only-buy perspective. Even if stocks do advance much further; that approach is still marketing, not analysis of a market, which would have to acknowledge the stretching of the move.  

So that's interesting; but even those in-agreement with us about rising risk, seem to be minimizing it by (for-instance) saying that stocks like Apple are only 4% of the S&P. Ha. Not even close. Really it's about 20% of activity; a reference to the concentration of no more than a handful of stocks clearly dominating the day-to-day behavior of the S&P Senior Index.  

Bottom-line: breadth may be superficially solid; but beneath-the-surface there's this continued evidence of 'individual wealth liquidations', while the institutional crowd keeps rotating in-hopes of keeping the upside alive. It's a market seeming on life-support, while its virtues are exaggerated.  

I have mentioned the real concerns about tariffs and retaliation that mostly are ignored (everyone presumes -and it may be- just negotiating ploys); at the same time that Chinese debt issues are real.  

Also the entire relationship with China, and the strategic balance in Asia, may hinge on the outcome of the Korean Summit. I'm going to elevate this to greater importance because I suspect Trump has figured-out what really large impacts can come of it.  

To wit: peace on the Korean Peninsula (even if it's years of phasing-out of nuclear weapons and American Forces presence in the South) means far more than just that. Peace is the 'micro' aspect of the potential settlement. The 'macro' aspect relates to involving Japan and the USA in rebuilding of an industrialized North Korea, which then would be drawn into a slight tilt to the US and South, more so than to it's perennial puppet-master, China.

I believe South Korea figured this out first; China got a handle on it second (perhaps why that additional trip by Kim to China); and Trump now realizes this IS a bigger deal than what everyone talks about on the surface. Hence a strategic victory might be at-hand should peace (and business) prevail; a slightly different outcome than China wanted, but they too are reluctantly it seems in the position of having to realize the US is on-top in this upcoming negotiating phase. Of course our media won't address it that way, even if it should be correct that the ancillary implications are so significant to Asia. 

In-sum: this is about to be an historic month; at least potentially. And with the outcome in Singapore at-stake, it's not wonder China toughened up in the South China Sea (to make their point); and we are doing the same as China (also not widely reported in the US) threatens Taiwan yet-again.  

It's definitely a time of yin-and-yang for politics, geopolitics, and markets. So we'd stay nimble and allow for sharp moves; although at the moment it is a market in a short of consolidation phase after a nominal breakout only for the NASDAQ; and there is no shot at new highs for the S&P for now.