The stock market continued its record-breaking streak on Thursday, with the S&P 500 index reaching a new high of 5,983.84 after the Federal Reserve’s interest rate cut. However, the market showed little reaction to the news, moving sideways afterward. This morning, S&P 500 futures suggest a 0.1% lower opening, indicating potential fluctuations and consolidation.
Investor sentiment improved as shown in Wednesday’s AAII Investor Sentiment Survey, with 41.5% of individual investors feeling bullish and 27.6% bearish. The S&P 500 continues to reach new records after Wednesday’s breakout, as seen on the daily chart.
The Nasdaq 100 also hit a new high of 21,132.80 after gaining 1.54% yesterday. Today, the Nasdaq 100 is expected to open 0.2% lower and may consolidate, with support levels between 20,800 and 20,900 marked by yesterday’s gap up.
The VIX index, a measure of market volatility, dropped by over 20% on Wednesday to near 15, confirming a risk-on sentiment in the market. Historically, a lower VIX indicates less fear in the market, while a rising VIX typically accompanies stock market downturns. However, an extremely low VIX could signal a potential market reversal.
The S&P 500 futures contract is flirting with the 6,000 level this morning, surpassing new highs. Support remains at 5,900-5,920, marked by recent highs. While the market may appear overbought in the short term, no confirmed negative signals are evident.
The stock market rally following the election results has raised questions about whether this is the start of a new uptrend or the final phase of a multi-month advance. End-of-year seasonality still supports a bullish outlook, but there may be a pullback due to short-term overbought conditions. The short-term outlook remains neutral for now.
