Stocks Surge to New Record Highs Post-Election
The stock market continued its upward momentum on Friday, with the S&P 500 hitting a new record high of 6,012.45, marking a 0.38% gain. This positive trend follows a sideways movement on Thursday but saw a significant improvement in sentiment on Friday. Looking ahead, S&P 500 futures are indicating a 0.4% higher open for the index, potentially setting the stage for another record high.
Bullish Sentiment on the Rise
Last week, investor sentiment saw a boost, as reflected in the AAII Investor Sentiment Survey, which reported that 41.5% of individual investors are bullish, while 27.6% are bearish. This increase in bullish sentiment has contributed to the market’s ongoing rally.
Analyzing the Market Performance
S&P 500: Almost +5% In a Week
The S&P 500 has seen a remarkable surge of 4.66% compared to the previous week’s close, reaching new record highs and extending its multi-year bull market. The key medium-term support level is now around 5,700, as indicated by recent lows.
Nasdaq 100: Breaching the 21,000 Level
The Nasdaq 100 achieved a new record high of 21,155 on Friday, with a modest gain of 0.07%. While the index is expected to open 0.5% higher today, it appears to be technically overbought in the short term and may be due for a correction or consolidation. The support level lies between 20,800 and 20,900, marked by Thursday’s gap up.
VIX Remains Near 15
The VIX, a measure of market volatility, declined by over 20% last Wednesday, dropping below the 20 level and nearing the 15 level. This decrease in volatility signals a risk-on sentiment and a lack of fear in the market. However, investors should note that a lower VIX could indicate a higher probability of a market downturn.
Futures Contract Advancing Beyond 6,000
The S&P 500 futures contract is approaching a new high this morning, surpassing the 6,050 level. While the market may seem overbought in the short term, no confirmed negative signals are currently evident. The support level is around 5,980-6,000.
Market Outlook and Conclusion
Stocks rallied last week, reaching record highs following the election results and the Fed’s interest rate cut. However, this week may see increased volatility or consolidation. Despite this, no negative signals are currently present. Investors will be closely watching the Consumer Price Index release on Wednesday.
In the short-term outlook, the market appears neutral, with a potential for a short-term consolidation. My analysis suggests that another record-breaking advance is anticipated today, but investors should remain cautious amid the ongoing market dynamics.
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Analysis:
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