Stocks are set to open slightly higher, but will the uptrend continue?
Stock prices broke higher on Tuesday as investor sentiment improved on signs of Middle East de-escalation, positive economic data, and renewed hopes for easing monetary policy. The S&P 500 index closed 1.11% higher - its highest level since February 20 - and moved closer to its February 19 record high of 6,147.43.
This morning, the market appears poised to retest that all-time high, with S&P 500 futures trading 0.1% higher in early action.
Investors are closely watching the second part of Federal Reserve Chair Jerome Powell’s testimony, scheduled for 10:00 a.m. today.
Investor sentiment has slightly deteriorated, as reflected in the last Wednesday’s AAII Investor Sentiment Survey, which reported that 33.2% of individual investors are bullish, while 41.4% are bearish.
The S&P 500 is nearing the 6,100 mark, as the daily chart indicates.
Nasdaq 100: Closing In on a New Record
The Nasdaq 100 led Tuesday’s gains, rising 1.53% and reaching just 2 points below its February 19 record high of 22,222.61.
Key support is now around the 21,900–22,000 area. While no negative technical signals are currently evident, the index may be entering overbought territory.
VIX Dips Below 18
Last Wednesday, the Volatility Index (VIX) dropped to a local low of 16.23, signaling reduced investor fear. It later rebounded to around 22.00 amid renewed Middle East tensions. However, yesterday, the VIX fell again to 17.33 - a move confirming the recent rally in equities and suggesting calmer market conditions.
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. Conversely, the higher the VIX, the higher the probability of the market’s upward reversal.
S&P 500 Futures Contract Holds Near Record Highs
This morning, the S&P 500 futures contract is trading slightly above the 6,150 level - the highest in history. The index has resumed its uptrend, breaking above recent local highs around 6,100, which now serves as a key short-term support level.
Markets remain highly sensitive to geopolitical developments and could stay volatile in the near term.
Conclusion
Stocks are set to extend their uptrend this morning. While no clear bearish signals are evident, the market may be approaching technical overbought conditions. Investors will closely monitor upcoming economic data and day two of Fed Chair Powell’s testimony.
Here’s the breakdown:
- The S&P 500 is closing in on its late-February record high and may soon retest that level.
- There are no clear bearish signals yet, but a deeper downward correction is not out of the question at some point.
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Paul Rejczak
Stock Trading Strategist
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