It took only four trading days for the S&P 500 index to do something quite extraordinary. An unprecedented rally of $3.7 trillion backed by corporate earnings and breaking oil prices lifted the index to an all-time new record of 7,776.68, marking its second record close of two months after hitting the psychological barrier at 7,620 on June 2. In addition, the Dow climbed above 54,000 on Tuesday, a level not witnessed in its entire history. The S&P 500 is up 20.58% from a year ago and up 3.3% so far in August, while the Nasdaq rose by nearly 5% within two trading days.The catalyst chain that led to this move is precisely the kind of thing that drives a bull market;not one isolated piece of news but a series of them, There is just one piece of news left before this bull market can go to the next level and it is today’s job numbers, in light of June’s disastrous performance with non-farm payroll employment growing just 57,000.

The price shows a breakout scenario which has actually been forming over a much longer period than the 4 day advance implies. The breakout pattern that has become apparent here is an ascending triangle formation which has broken to the upside, characterized by a horizontal resistance level around the June highs at 7,620 and a series of higher lows which have been formed throughout July in a tightening price range leading to its eventual breakout. This breakout occurred on Tuesday when there was a clear gap above resistance, trading on a volume level of 2.92 billion shares;institutional participation not the kind of retail euphoria that is typical of a bounce.The 4EMA pattern, which includes 20 EMA at 7,174 and 50 EMA at 6,999, sharply sloping upwards from left to right, provides the necessary layers of dynamic support for this trend being in a positive momentum. The 200 EMA is sitting at 6,863; it is the structural support which has not been really threatened since the April's liberation shock, and the distance between it and the current price level, 850 points, clearly indicates how much upside there has been in the market. Finally, RSI is at 64.17; it is the most informative indicator on this chart. The value of RSI is higher than its signal line of 52.05, and the difference of 12 points indicates the strength of buying pressure that is still below the overbought area of 70 points..In a market that is posting 45% earnings growth YoY and the geopolitical tailwind fading in the rearview mirror, the fact that RSI has not yet reached 70 means that this move still has more to do before we need to be concerned with exhaustion in the move. The MACD is not present in its usual form in this particular chart, but the price action and the EMA configuration reinforce the message conveyed by the indicator that the trend has accelerated, the EMAs are bullish and the ascending triangle breakout is the prevailing technical picture.

Trade recommendation

Direction: Long
Entry horizon: 7,620 – 7,700
Primary target: 7,776
Secondary target: 8,000
Stop loss: Daily close below 7,488
Risk note: July NFP jobs report lands this morning

Technical scenarios

Bull case: Employment strength validates the breakout ;8,000 next: Should July NFP exceed the 175,000 consensus, it effectively exposes June's 57,000 catastrophe as a transitory outlier rather than a structural decay of the labor market. This outcome would provide the fundamental backbone for the ascending triangle breakout, with the former 7,620 ceiling establishing itself as rock-solid support. Technically, we would anticipate the RSI breaching the 70 threshold for the first time since the summer peak, while price action stabilizes above the 7,776 record before launching toward the 8,000 psychological milestone. A confluence of catalysts led by 45% earnings growth and cooling oil prices grants this rally what Bespoke Investment Group defines as "longer legs," turning August into a historic outlier for equities fueled by the AI supercycle.

Base case: In-line payrolls support consolidation above resistance: A print landing near consensus would likely maintain the status quo, avoiding both recessionary panic and fears of renewed Federal Reserve hawkishness. In this scenario, the S&P 500 would likely digest its record high via a disciplined retracement toward the 7,620–7,700 breakout zone;a region where former resistance must now prove its mettle as dynamic support. This would allow the RSI to cool from its current 64 reading toward 58, permitting the TEMA 9 to converge with price within the established ascending triangle framework. For traders sidelined during Tuesday's massive gap, a successful retest of this zone on a closing basis represents the highest-quality entry signal available in current chart analysis.

Bear case: Labor market miss revives recessionary fears ;stop discipline is critical: A second consecutive shock, specifically a print falling below 100,000, would suggest that June's weakness was the onset of a genuine deterioration, potentially leaving the Fed hamstrung despite current rate levels. Such a fundamental shift would immediately challenge the integrity of the ascending triangle breakout, putting the TEMA 9 at 7,444 under intense scrutiny. A daily close beneath 7,488 would confirm that the $3.7 trillion surge was merely a short covering squeeze rather than a sustainable trend resumption. However, until such a violation occurs, the technical framework remains dominant;anchored by significant volume, a bullish EMA alignment, and the most robust earnings performance the index has produced in recent memory.