Two weeks ago the rally was starting to show some cracks. They were all repaired last week… and then some. Indeed, stocks logged a major gain during the holiday-shortened week, ending at record highs above important technical ceilings. The unlikely move leaves traders wondering what’s next — is there actually room for more upside? There may well be. depositphotos On the flipside, there’s one largely-overlooked reason to at least consider the possibility that the market’s near a major peak.We’ll look at that reason in some detail in a moment. Let’s first look at last week’s most important economic reports and then preview what’s in the lineup this week. Economic Data AnalysisNot a whole lot last week, but the economic news we did get was relatively important.The party started in earnest on Monday with last month’s manufacturing index data from the Institute of Supply Management. Rather than rising as expected, it fell even further below the pivotal 50 level. Meanwhile, the ISM Services Index also fell for a second month in a row — and back under the 50 mark to a multi-month low — pretty much quelling any hopes that the recent turnaround effort was set to get prolonged traction. ISM Services, Manufacturing Index Charts

Source: Institute of Supply Management, TradeStation There aren’t a lot of different interpretations of the ISM data… this is a problem for the market.The only other major report delivered last week is June’s jobs report. It too is suggesting economic weakness. Although the 208,000 jobs created topped expectations of 200,000, that’s still down from May’s lower-adjusted number of 218,000. Unemployment Rate, Payroll Growth Charts

Source: Bureau of Labor Statistics, TradeStation The unemployment rate still managed to edge up to a multi-year high of 4.1%. In fact, that’s the highest unemployment rate we’ve seen since late-2021 when it was on the way down thanks to the post-pandemic economic recovery underway at the time.Everything else is on the grid. Economic Calendar

Source: Briefing.com This week is a light one overall, but we’re set to hear one heavy-duty batch of economic news. That’s June’s inflation data. Consumer inflation figures will be reported on Thursday, with producer inflation numbers scheduled for Friday. Economists are looking for continued price increases in line with recent above-average price growth. Inflation Rate Charts

Source: Bureau of Labor Statistics, TradeStation Almost needless to say, this helps push the next interest rate cut at least a little further down the road. Stock Market Index AnalysisIs there really such a thing as too much of a good thing? Keep that question in the back of your mind for a moment.We start this week’s analysis with a look at the daily chart of the S&P 500, although there’s really only one detail we want to hone in on here. That’s Friday’s move above the technical ceiling (red, dashed) connecting all the key highs going back to early-2023. That being said, also just appreciate just how far the index has advanced since October’s low. It’s now up an incredible 36% from that bottom. S&P 500 Daily Chart, with VIX and Volume

Source: TradeNavigator Now let’s zoom out to a weekly chart of the index. You might have to squint a little, but you can still see the break above that long-term resistance line. S&P 500 Weekly Chart, with VIX and MACD

Source: TradeNavigator That’s not the noteworthy feature here, however.We haven’t discussed it in a few weeks simply because there was no need to. But, the cup-and-handle pattern that was completed near the very end of last year may have nearly run its course. The approximate end to a break above the brimline is roughly the same distance between the brimline and the bottom of the cup. For the S&P 500, that’s an upside target of around 5,655 (green, dashed).The thing is, the Nasdaq Composite is similarly close to its cup-and-handle-projected target of 19,100 (green, dashed). Also notice on the weekly chart below that the composite just pushed a hair above its long-term technical ceiling (red, dashed) going back to late-2022 as well. Nasdaq Composite Weekly Chart, with MACD and Volume

Source: TradeNavigator This makes things tricky. Breakout thrusts above technical ceilings are usually bullish catalysts… even including ones following major rallies (like this instance). This recent bullishness has been freakishly strong though, yet on subpar volume. The rally may well be exhausting itself, and doing so near a natural technical ceiling. As firm as the advance seems like it is, we could be at or near a major peak. Again, stocks are well up here…. higher by more than 12% in just the past month and a half.It’s also worth adding that while June and July are typically both bullish months, August and September aren’t.So, the timing of all of this is near-perfect. The market’s key indexes could continue coasting higher for two or three more weeks, then hit their technical ceilings, and then start their usual summertime swoon fueled up with a ton of profit-taking potential. Any correction could be significant (and we’re certainly due).That’s one possible future anyway. For now the momentum is bullish. The trend is your friend until it clearly isn’t.More By This Author:Weekly Market Outlook – Despite Last Week’s Gain, More Red Flags Are WavingWeekly Market Outlook – Technical Resistance Remains In The Way Weekly Market Outlook – The Bulls Need To Learn A Thing Or Two About Pacing