Stocks Hit New Record Highs - Is There Still Room to Run?

Paul-Rejczak Paul Rejczak 14 h 38 min ago

The S&P 500 broke above its February high on Friday — how much higher could it go?

 

The S&P 500 Index gained 0.52% on Friday, extending its uptrend and reaching a new record high of 6,187.68 – around 40 points above its February 19 peak. The rally was supported by easing tensions in the Middle East and optimism around potential new tariff-related agreements.

This morning, the S&P 500 is expected to open 0.3% higher, potentially testing its all-time high and nearing the 6,200 level.

Investor sentiment has slightly improved, as reflected in last Wednesday’s AAII Investor Sentiment Survey, which reported that 35.1% of individual investors are bullish, while 40.3% are bearish.

The S&P 500 continued its uptrend last week, as the daily chart indicates.

Stocks Hit New Record Highs - Is There Still Room to Run? - Image 1

 

S&P 500: Breakout on the Weekly Chart

The S&P 500 closed last week 3.44% higher, breaking above its November–February trading range. The market is extending its multi-year bull run, with support now around the 6,000–6,100 zone - the prior resistance area.

Stocks Hit New Record Highs - Is There Still Room to Run? - Image 2

 

Nasdaq 100: Record After Record

The Nasdaq 100 ended Friday 0.39% higher, underperforming the broader market slightly. It still reached a new all-time high at 22,603.22.

While no immediate technical sell signals are evident, the index may be entering overbought territory, suggesting the potential for short-term consolidation or a correction

Stocks Hit New Record Highs - Is There Still Room to Run? - Image 3

 

Volatility Stopped Dipping

The Volatility Index (VIX) hit a local low of 16.11 on Thursday - the lowest since February 21 - reinforcing the strength of the equity rally and signaling calmer market conditions. However, despite the continued stock market advance, the VIX failed to make a new low on Friday, which could be a warning sign for bulls.

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.

Stocks Hit New Record Highs - Is There Still Room to Run? - Image 4

 

S&P 500 Futures Contract Extends Gains

This morning, the S&P 500 futures contract is trading near the 6,250 level, reflecting sustained bullish sentiment following the weekend. Support is around 6,200, marked by Friday’s trading range.

Markets remain highly sensitive to geopolitical developments and could stay volatile in the near term.

Stocks Hit New Record Highs - Is There Still Room to Run? - Image 5

 

Conclusion

The S&P 500 is expected to slightly extend its uptrend this morning, supported by positive sentiment and end-of-month, quarter, and half-year positioning. These calendar effects are contributing to hopes for further gains.

I think that in the short term, overbought technical conditions may lead to a period of consolidation or a mild pullback. However, no clear bearish signals are currently evident.

Here’s the breakdown:

  • The S&P 500 broke above its February high on Friday, extending gains for those who bought based on my Volatility Breakout System.
  • 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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Thank you.

Paul Rejczak
Stock Trading Strategist

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