Stock prices went up, with the S&P 500 ending 0.61% higher and approaching a record high of 6,284.65. The boost came from tech giants NVDA and MSFT. Notably, NVDA’s market cap reached $4 trillion, despite concerns about its valuation. The AAII Investor Sentiment Survey indicated that 41.4% of investors are bullish while 35.6% are bearish. S&P 500 futures show a flat opening, stabilizing around the 6,300 mark, with resistance at 6,320 and support around 6,250.

Nasdaq 100 Performance

The Nasdaq 100 rose by 0.72%, hitting a new high of 22,915.33, also supported by NVDA and MSFT. Meanwhile, the VIX fell to a local low of 15.76, signaling reduced market fear. Crude oil saw a slight increase of 0.07%, continuing its consolidation. Prices remained steady, though they dipped due to unexpected inventory data, with current resistance at $69 and support at $67. The S&P 500 is close to all-time highs, with no strong negative signals, though profit-taking may happen. Short-term overbought conditions might cause some consolidation or a slight pullback, but there are no clear bearish indicators.

Trader’s Perspective

Equity indices have been rising steadily, driven by a few strong stocks, particularly in technology. The S&P 500 is approaching its historical peak, closing over half a percent higher. While this may suggest strength, calling it unshakeable would be an exaggeration. The majority of the gains come from two key tech firms, with one company now valued at $4 trillion despite ongoing valuation debates. These rising prices indicate the market may be ready to overlook broader economic concerns when company earnings are strong. Data from the American Association of Individual Investors (AAII) shows a divided sentiment. With just over 40% feeling optimistic and a little over one-third remaining pessimistic, we aren’t witnessing the euphoric levels that typically precede market declines. This reflects cautious optimism, leaning more towards balance than overwhelming confidence, which is important as markets approach record highs. Futures data shows little movement in the short term, with S&P 500 futures moving sideways. Since prices are stabilizing, traders might be looking for a breakout above the 6,320 level or a drop closer to 6,250 before adjusting their strategies. Without clear signals, many may prefer short-term strategies or to take advantage of volatility fades. The Nasdaq 100’s rise of 0.72% reflects the S&P’s trends but remains narrow at the top. Participation in this rally is limited, showing dependence on a few standout performers. The volatility index (VIX) falling to around 15.76 suggests little demand for hedging, possibly indicating undervalued risks. While this does not predict a market move, such low levels of volatility often lean towards a quick correction back to the mean. In the energy market, oil’s small gain is overshadowed by a lack of direction. Prices have been stuck in a range, struggling to rise even when technical factors suggest it might. A drop in inventory expectations dampened the previous week’s small rebound. With resistance at $69 and pressure around $67, there’s no urgency in either direction. However, those in energy derivatives should stay alert to rollover effects and gamma shifts as expiration approaches. When considering trading strategies, the main US index is near its peaks without clear signs of risk aversion. Prices are extended, which, while not predictive, raises the chances of intraday reversals or brief periods of consolidation. Traders focusing on short-term options might favor range-bound strategies or sell premium options in environments that present decay opportunities. Overall, there is little directional conviction in the market. The best opportunities now might be found in selective pairing strategies or hedging for index performance, where risks and rewards can be more favorable. No sharp shifts are indicated yet, but the data and positions we observe do not rule out strong mean-reverting movements either. Create your live VT Markets account and start trading now.

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