On Monday (10 June), we could see that the market remains in a waiting mode ahead of Wednesday (12 June)’s CPI and Fed releases. Stock prices extend their short-term indecision and a consolidation ahead of the important inflation data and the Fed release on Wednesday (12 June).
The $S&P 500(.SPX)$ gained 0.28% yesterday, closing the highest in history. On Friday, it reached a new record high of 5,375.08 before retracing the intraday advance. On Tuesday (11 June) we saw S&P 500 index close at a new high of 5,375.32.
Investor Sentiment Remained Unchanged Last Week
Investor sentiment remained unchanged last week, as indicated by the AAII Investor Sentiment Survey from 05 June (Wednesday), which showed that 39.0% of individual investors are bullish, while 32.0% of them are bearish (up from last week (29 May 2024)'s reading of 26.7%).
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.
The S&P 500 breached its upward trend line (at 5,324.22) on 07 June 2024 (Friday), signaling another short-term pause within an uptrend, as we can see on the daily chart.
But S&P 500 prove us wrong on Tuesday (11 June) by clearing 5,370 level. This is encouraging especially one day before the release of key economic data from the FOMC meeting.
Nasdaq 100 Remains Close to Record High
The technology-focused $NASDAQ 100(NDX)$ closing at a new record high of 19,210.18, higher than the high on Monday (10 June 2024), it gained 0.88%, extending a consolidation.
VIX Below 13 Amidst Uncertainty
The $Cboe Volatility Index(VIX)$, also known as the fear gauge, is derived from option prices. In late May, it set a new medium-term low of 11.52 before rebounding up to around 15 on correction worries.
Last week, the VIX came back lower, and on Friday, it was as low as 12.11, signaling less fear in the market. We saw VIX at 12.86 despite the uncertainty and indecision before economic data from FOMC meeting.
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
On Tuesday, we saw the S&P 500 (+0.3%) and Nasdaq Composite (+0.9%) climbed further into record territory. But will we see Wednesday trading with indecision as investors comprehend the key data tomorrow: Consumer Price Index and the FOMC Rate Decision.
The S&P 500 index is likely to remain relatively close to its recently acquired highs; however, a profit-taking action cannot be ruled out at some point. The S&P 500 may extend fluctuations after the important data tomorrow.
Appreciate if you could share your thoughts in the comment section whether you think market will see some fluctuation after the important data release today (12 June 2024).
@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.
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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