Wall Street is riding high this quarter. Bank of America thinks there may be some turbulence once the third quarter begins. Technical strategist Paul Ciana warned clients that risks of a correction are moving higher, advising investors "add hedges into rallies, trade / roll during corrections, and assess later if year-end upside can materialize." There are "many headwinds," he said in a note, adding that the S & P 500 could see resistance around the 7,700 level. The benchmark closed at 7,358.22 on Wednesday and hit an all-time high of 7,620.90 on June 2. .SPX YTD bar SPX year to date Easing tensions in the Middle East along with a comeback in artificial intelligence-linked stocks are responsible for the stock market's strong performance of late. The S & P 500 is up 12.7% in Q2, putting it on pace for its best quarterly gain since the second quarter of 2020, when it rallied nearly 20%. However, certain cracks have emerged in the market's upward move, including breadth divergences and volatile swings in chipmakers due to overleveraging . Ciana said investors should watch these support levels going forward: 7,349 7,238 7,197 7,029 To be sure, Ciana expects the potential correction to be short lived thanks to a "typically supportive post‑midterm backdrop and a potential year-end Santa rally."
<small>Source: CNBC</small>
