Essential Market Update: SP500 Technical Analysis & Predictions | Episode 256

By Jason McIntosh | 19 October 2024

S&P 500 Hits New All-Time High: Analyzing Market Trends and Opportunities

The S&P 500 reached another all-time high on Thursday, showcasing the resilience of the current bull market. Let’s dive into the factors driving this trend and explore potential opportunities for investors.

Bullish Trend Continues

Despite lingering skepticism in some quarters, the S&P 500 maintains a bullish trend:

• Rising 50-day and 100-day moving averages
• Price consistently above these moving averages
• A series of higher highs and higher lows

This pattern defines an uptrend, and historical data suggests that 52-week highs often lead to further strength in the long term.

Broad-Based Rally

The equal-weighted S&P 500 index has also been setting new all-time highs throughout the year. This indicates a broad-based rally, which is a hallmark of healthy bull markets. Unlike previous rallies dominated by a narrow group of stocks, the current uptrend shows wide participation across various sectors.

FANG Stocks: Not the Primary Driver

Interestingly, FANG stocks (Facebook, Amazon, Netflix, Google) are not the primary drivers of this latest rally. While still in an uptrend, these tech giants have yet to reach new all-time highs. This further supports the notion of a broader market rally that isn’t solely dependent on AI and technology sectors.

Dow Jones Industrial Average: A Strong Performer

The Dow Jones Industrial Average, often considered “old-fashioned,” is showing remarkable strength. Its chart structure may be the most impressive among U.S. indices, featuring:

• A well-formed series of rising lows
• Consistently higher highs
• Rising 50-day and 100-day moving averages since November last year

Emerging Opportunity: Russell 2000

The Russell 2000, representing small-cap stocks, is gaining momentum:

• Strong rally off the 50-day moving average
• Breaking out of a sideways pattern since July
• Potential to surpass the November 2021 high

An indicator showing the percentage of Russell 3000 stocks above their 100-day moving average has been steadily increasing, currently at 70%. A breakthrough above this level could signal further strength in small-cap stocks.

Conclusion

While it’s natural to be cautious at all-time highs, the current market structure suggests ongoing strength. The broad-based nature of this rally, coupled with emerging opportunities in small-cap stocks, presents a positive outlook for investors. As always, it’s essential to maintain a balanced approach and stay attuned to changing market conditions.

SP500 Strategy Session Video

00:00 Overview of today’s stock market technical analysis

00:30 Essential insights for SP500 bulls and bears

01:55 Understand the price action: Key takeaways and next steps

02:50 Crucial detail you can’t afford to miss!

04:00 Unveiling the top chart structure among US indices

05:30 Discover which stocks are primed for a rally!

Trade the Trend is a weekly video focusing on where the stock market is going. It’s for investors and traders looking for technical analysis of the ASX stocks, the ASX200, the SP500, as well as stock markets and commodities markets in general. Jason uses technical analysis of stocks and trend following techniques to help you piece together the world’s biggest puzzle.

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