The S&P 500 set a record Friday, then closed lower — what’s next?
Stocks moved essentially sideways on Friday as investors awaited the Trump-Putin conference in Alaska. The S&P 500 reached yet another all-time high of 6,481.34 before pulling back to close 0.29% lower. Today, the index is expected to open 0.1% lower, likely extending its recent fluctuations.
Investor sentiment has further deteriorated, as reflected in last Wednesday’s AAII Investor Sentiment Survey, which reported that 29.9% of individual investors are bullish, while 46.2% are bearish.
The S&P 500 remains near its record high, as shown on the daily chart.
S&P 500 Futures Contract Pulls Back from 6,500
This morning, the S&P 500 futures contract is trading lower, extending Friday’s pullback from a new record high above the 6,500 level. It has broken below a short-term downward trend line and is currently near 6,450–6,460 support.
Market Outlook: Nearing a Correction?
The S&P 500 may continue its short-term consolidation this morning, with futures pointing to a 0.1% lower open. Uncertainty could indicate a topping pattern, though it may also be just another pause in the uptrend.
That said, no negative signals are evident, although a deeper correction at some point is not out of the question.
Here's what I think is most likely:
- The S&P 500 reached a new record on Friday but is likely to move sideways this morning.
- My Volatility Breakout System flipped to a long position on August 7 and is currently in profit.
What This Means for Your Portfolio
For individual investors, this environment calls for careful position management. While the market continues to advance, the combination of low volatility, seasonal weakness signals, and stretched valuations suggests that defensive positioning may become increasingly important in the weeks ahead.
The current market conditions highlight the value of having a systematic approach to investing rather than trying to time every market move. Whether you're using technical systems like the Volatility Breakout System or following seasonal patterns, having a disciplined framework becomes crucial during uncertain times.
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Thank you.
Paul Rejczak
Stock Trading Strategist