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The major U.S. stock indices finished last week essentially unchanged, on the heels of back-to-back positive weeks, as the benchmark S&P 500 ran into a wall of formidable overhead resistance.

The market is now at a major decision point, pressured by the well-known seasonal influence of “sell in May and go away.” However, I’m starting to see some positive signs that suggest unexpected strength in the market.

Interestingly, the three strongest sectors of the S&P 500 last week were all defensive ones: utilities (2.6%), health care (1.6%) and consumer staples (1.1%).

The table below shows that, according to Asbury Research’s own ETF-based metric, the biggest positive change to inflows over the past one-week and one-month periods was in financials, while the biggest outflows were from energy. The outflows from energy support my contention that oil and energy-related asset prices are vulnerable to a corrective pullback, which I discussed in last week’s report.

Stocks Leaning Higher

The S&P 500 finished last week at 2,099, above both its 200-day (major trend proxy) and 50-day (minor trend proxy) moving averages, but just below a formidable band of overhead resistance at 2,104 to 2,135. The band encompasses the November, December and April highs, with the upper end representing the May 2015 all-time high.

This sets up a major decision point: Investors must collectively decide whether the current uptrend is still valid. A sustained rise above 2,135 would be necessary to clear the way for a new bullish intermediate- to long-term trend in this range-bound index.

When the S&P 500 is at big decision points, I always look to the usual market leaders — including semiconductors and small-cap stocks — for clues on how the broader market is likely to resolve the issue.

The next chart shows that the PHLX Semiconductor (SOX) index rose above an important wall of overhead resistance at 682 to 693 last week, which is similar in significance to the 2,104 to 2,135 level on the S&P 500.

This breakout clears the way for a run to the next key resistance level at 751, which is the June 2015 high and more than 6% above Friday’s close.

Meanwhile, the Russell 2000 has risen well above its 200-day moving average and June 2015 downtrend line, both situated near 1,110, to close as high as 1,171 on Thursday. This was the small-cap index’s best close since Dec. 4.

I view the recent bullish breakout in semiconductors and small caps as a potential indication that the S&P 500 is likely to clear resistance in the months ahead.

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Major Decision Point in 10-Year Yields

In the May 23 Market Outlook, I pointed out that a broken chart pattern in the yield of the 10-year Treasury note, as well as in a number of related ETFs and futures contracts, indicated that an important bottom was in place in long-term U.S. interest rates. That observation, which stands this week, is based on yields’ erratic movement in and out of a well-defined area of investor indecision between May 13 and June 3.

The key levels to watch this month are 1.71%, which is where the 10-year closed on Friday, and the February closing low of 1.63%. Based on this broken pattern, I expect support to hold as yields falls and anticipate a gradual move toward 2% as the Federal Reserve eventually makes good on its stated intention to raise interest rates this year.

Since rate hikes would signal that the extremely cautious Fed is confident the U.S. economy is strengthening, I believe that higher interest rates will ultimately support what appears to be an emerging breakout in the U.S. stock market.

Doctor Copper Is In

Jim Grant, editor of Grant’s Interest Rate Observer, refers to copper as “Dr. Copper, the metal with a Ph.D. in economics” because of the industrial metal’s tendency to predict periods of economic expansion or contraction.

Two weeks ago, I discussed a potential bullish trend change in the Global X Copper Miners ETF (NYSE: COPX).

After rising above its 200-day moving average in mid-February and peaking on May 2, COPX declined back toward its 200-day moving average at $13.49, which is now key underlying support.

The ETF also became technically oversold, according to the 21-day stochastic oscillator shown in the lower panel. The chart shows similar oversold conditions closely coincided with near-term bottoms in COPX on Jan. 20 and April 7.

So, if February’s rise above the 200-day was indeed an emerging major bullish trend change, this latest oversold extreme should help trigger another similarly important bottom in what could be an emerging bull market.

Putting It All Together

The benchmark S&P 500 index began this week just below major overhead resistance and just above major and minor support. So, it entered this week at a major decision point that is likely to become the springboard for the market’s next intermediate-term trend.

Although I would not rule out a minor pullback from overhead resistance first, recent strength in market-leading semiconductor and small-cap indices tilts my bias toward the likelihood of an eventual bullish resolution. Should that occur, it could clear the way for the next sustainable bull market in stocks.

Moreover, what appear to be an emerging bottom in both long-term U.S. interest rates and economically influential copper prices support a slowly strengthening U.S. economy that would be characteristic of a strengthening stock market.

This article originally appeared on ProfitableTrading.com: Market Reaches Crucial Decision Point