June 18, 2024 (Investorideas.com Newswire) Regardless of reasonably impartial expectations earlier than the opening of the S&P 500 index, inventory costs broke above their current buying and selling vary yesterday, and the index reached a brand new file excessive of 5,488.50. It closed 0.77% larger after a slight retreat on the finish of the day. This morning, futures contracts are pointing to a different flat opening for the index, following lower-than-expected Retail Gross sales knowledge.
In my forecast for June, I wrote “For the final three months, the S&P 500 index has been fluctuating alongside new file highs, above the 5,000 degree which was damaged in February. It appears like a consolidation inside a long-term uptrend, however it might even be a topping sample earlier than some significant medium-term correction. What’s it more likely to do? Because the saying goes, ‘the development is your good friend’, so the most definitely state of affairs is extra advances sooner or later.
Nonetheless, a detrimental sign can be a breakdown under the 5,000 degree. That might increase the query of a deeper correction and downward reversal. I feel that the probability of a bullish state of affairs is 60/40 – a downward reversal can’t be utterly dominated out. The market might be ready for extra alerts from the Fed about potential rate of interest easing, plus, on the finish of the month, the approaching earnings season could dictate the market strikes.”
Investor sentiment a lot improved, as indicated by the AAII Investor Sentiment Survey final Wednesday, which confirmed that 44.6% of particular person traders are bullish, whereas 25.7% of them are bearish (down from final week’s studying of 32.0%). The AAII sentiment is a opposite indicator within the sense that extremely bullish readings could counsel extreme complacency and an absence of concern out there. Conversely, bearish readings are favorable for market upturns.
The S&P 500 index continues to commerce above a short-term upward development line, as we are able to see on the every day chart.
Nasdaq 100 Accelerated Greater
On Monday, the technology-focused Nasdaq 100 index reached a brand new file excessive of 19,977.84 and closed 1.24% larger. As soon as once more, it was led by the rallying big-cap shares, together with AAPL, MSFT, and NVDA. This morning, the Nasdaq 100 is more likely to open 0.2% larger, suggesting that the index would possibly take a breather after its robust efficiency yesterday.
VIX Going Sideways
The VIX index, often known as the concern gauge, is derived from possibility costs. In late Could, it set a brand new medium-term low of 11.52 earlier than rebounding as much as round 15 on correction worries. Not too long ago, the VIX got here again in the direction of 12. On Friday, it was as excessive as 13.45, earlier than closing inside a short-term vary, and yesterday, it remained close to the 13 degree.
Traditionally, a dropping VIX signifies much less concern out there, and rising VIX accompanies inventory market downturns. Nonetheless, the decrease the VIX, the upper the chance of the market’s downward reversal.
Futures Contract Trades Above 5,500
Let’s check out the hourly chart of the S&P 500 futures contract. Yesterday, it broke above the current buying and selling vary and a resistance degree of round 5,500, and this morning, it’s buying and selling inside a comparatively slim worth vary – alongside a brand new file excessive. There have been no confirmed detrimental alerts thus far; nevertheless, a profit-taking motion could happen in some unspecified time in the future. The assist degree is now at 5,500.
Conclusion
Will shares additional prolong their uptrend and attain new information regardless of some short-term overbought situations? There have been no confirmed detrimental alerts; nevertheless, later within the week, the market will get extra financial knowledge: the Unemployment Claims on Thursday, and on Friday – the necessary Flash Manufacturing PMI/ Flash Companies PMI knowledge. Tomorrow, there might be a vacation within the U.S., doubtless resulting in calm buying and selling immediately. On Friday, the ‘quadruple witching day’ could trigger volatility.
On earlier Friday, I famous “Will the market retrace a few of its current rally? The bearish argument is comparatively skinny buying and selling, with solely a handful of shares like NVDA, MSFT, or AAPL answerable for the rally. Then again, the development continues to be upwards, therefore additional advances are extra doubtless”
For now, my short-term outlook stays impartial.
This is the breakdown:
- The S&P 500 is more likely to open just about flat and fluctuate following yesterday’s rally; it might see a profit-taking in some unspecified time in the future.
- Inventory costs reached new file highs regardless of blended knowledge and rising uncertainty.
- In my view, the short-term outlook is impartial.
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