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Stock prices continued their uptrend on Friday, with the S&P 500 gaining 0.54% and breaking above the 5,600 level. The market is once again nearing its July 16 record high of 5,669.67. But will it continue upward? Today, the index is expected to open 0.1% lower as markets await the FOMC rate decision on Wednesday. In the short term, the market appears more and more overbought, making a correction likely at some point. Last week, the investor sentiment worsened, as shown by AAII Investor Sentiment Survey on Wednesday, which reported that 39.8% of individual investors are bullish, while 31.0% of them are bearish, up from 24.9% last week. The S&P 500 index is approaching its August local highs, as we can see on the daily chart. S&P 500: +4% last week Compared to the previous Friday’s close, the S&P 500 gained 4.02%, retracing nearly all of the prior week’s 4.3% decline. Last Monday, I wrote “I still think the recent decline is just a downward correction, likely part of a medium-term consolidation that started after the mid-July record high.” This was accurate, and the market could experience more volatility following the Fed’s update on Wednesday. Nasdaq 100: Still relatively Weaker The technology-focused Nasdaq 100 gained 0.47% on Friday, extending its short-term uptrend. However, it remains relatively weaker, trading well below the local high from August 22 and far beneath the July 10 record high of 20,690.97. This morning, the Nasdaq 100 is expected to open 0.4% lower. VIX: Continued decline On the previous Friday, the VIX index, a measure of market fear, reached a local high of 23.76. It was indicating elevated fear among investors. Last Wednesday, the rebound in stocks pushed the VIX lower, and on Friday it closed below 17. Historically, a dropping VIX indicates less fear in…

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Filed under: News - @ September 16, 2024 1:29 pm