Wednesday trading session has shown that investors are more confident on the market with S&P 500 index rebounding from the 5,250 level and closing 1.18% higher.
Today, futures contracts are pointing to a 0.3% higher open for the index, suggesting an attempt to break above a short-term trading range. Investor sentiment did not change following the ADP Non-Farm Employment Change release, which was lower than expected at +152,000. Last Friday, stock prices bounced from their new local low, and the index got back above the crucial 5,250 level. e most likely scenario is more consolidation and sideways trading.”
Investor sentiment worsened last week, as indicated by the AAII Investor Sentiment Survey last Wednesday, which showed that 39.0% of individual investors are bullish (a decrease from the previous week's reading of 47.0%), while 26.7% of them are bearish.
The AAII sentiment is a contrary indicator in the sense that highly bullish readings may suggest excessive complacency and a lack of fear in the market. Conversely, bearish readings are favorable for market upturns.
S&P 500 Above 5,300. Shall Continue Today (06 June 2024)
The $S&P 500(.SPX)$ went above the 5,300 level yesterday, as we can see on the chart below. This trend could continue again today (Thursday) as we are seeing investors confidence returning.
Nasdaq 100 Move Away From Going Sideways. Above $19,000
On May 23, the technology-focused Nasdaq 100 index reached a new record high of 18,907.54, and last Friday, it was as low as 18,189.78, which means a 3.8% downward correction in a little more than a week.
But we saw the $NASDAQ 100(NDX)$ trading sideway on Monday, but it break above $19,000 after NASDAQ gain 2% on Wednesday trading session.
Today, the Nasdaq 100 is expected to open 0.5% higher, likely breaking above Tuesday’s and Wednesday’s trading range.
VIX Is Still Close to 13
The $Cboe Volatility Index(VIX)$ , also known as the fear gauge, is derived from option prices. In late March, it was trading around the 13 level. However, market volatility led to an increase in the VIX, and on April 19, it reached a local high of 21.4 - the highest since late October, signaling fear in the market. Recently, it was declining again, and on May 23, it reached its lowest point since November 2019 at 11.52. Y
esterday, it went below the 13 level despite rebounding above 14 recently. Historically, a dropping VIX indicates less fear in the market, and rising VIX accompanies stock market downturns. However, the lower the VIX, the higher the probability of the market’s downward reversal.
Summary
Thursday’s trading session is about to open higher for the S&P 500 index, which may break the 5,370 level as his could be possible as it has get past 23 May record high of 5,341.88.
Appreciate if you could share your thoughts in the comment section whether you think S&P 500 is slowly creeping higher to a new record?
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Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.
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