Stock prices soared past recent limitations on Tuesday as the S&P 500 surged to a peak of 5,488.50, marking an increase of 0.77% before a slight pullback at closing. The performance defied projections as expectations seemed tepid during the opening bell. Today, however, futures contracts hint at another flat start for the index, influenced by disappointing Retail Sales figures.
In June, I penned a forecast encompassing the S&P 500’s intriguing trajectory, postulating the possibility of a sustained uptrend or an impending correction. With the index bobbing above 5,000 since February, the market appeared to be consolidating, potentially setting the stage for a significant downturn. Yet, as the ancient market adage goes, “the trend is your friend,” suggesting that further progress looms on the horizon.
Encouragingly, investor sentiment is on the mend as evidenced by the latest AAII Investor Sentiment Survey, revealing a surge in bullishness among individual investors. A notable 44.6% now hold an optimistic outlook, while merely 25.7% remain bearish – a substantial drop from the previous week. Such sentiment readings, though contrary in nature, highlight the market’s delicate balance between exuberance and caution.
Charting the S&P 500’s course unveils a sustained surge above a short-term upward trend line, underscoring the index’s resilience amidst turbulent market conditions.
Nasdaq 100 Surges to New Heights
On Monday, the Nasdaq 100, a tech-laden index, smashed records by reaching a high of 19,977.84, closing the day with a 1.24% gain. Spearheaded by tech giants like AAPL, MSFT, and NVDA, the index showcased remarkable resilience in the face of market volatility. Today, a modest 0.2% uptick anticipates a breather following Monday’s fervent rally, a testament to the index’s unwavering momentum.
VIX Treads Narrow Path
Meanwhile, the VIX, nicknamed the fear gauge, wavered around the 13 level after hovering at a medium-term low in late May. While historically viewed as a barometer of market trepidation, the VIX’s fluctuating trajectory serves as a complex signal. As the VIX oscillates, so too does market sentiment, reflecting a delicate equilibrium between fear and confidence among investors.
Futures Contract Leaps to Unprecedented Heights
Peering into the hourly chart of S&P 500 futures, yesterday’s breakthrough beyond the 5,500 mark underscores the index’s bullish momentum. Trading near a historic high today, no glaring signals of retreat have emerged yet. However, a potential profit-taking scenario looms on the horizon, with the support level solidified at 5,500.
Conclusion
Will the market sustain its upward trajectory amidst signs of short-term overbought conditions? With crucial economic data on the horizon, including Unemployment Claims and Flash Manufacturing PMI/Flash Services PMI, this week promises further insight into the market’s resilience. While a U.S. holiday may induce subdued trading today, the looming “quadruple witching day” on Friday hints at potential volatility ahead.
Short-term prospects remain neutral as the market navigates this delicate juncture. Stock prices persist in their upward climb, defying odds and painting a picture of resilience in the face of uncertainty.
Stay tuned for more updates!