Call 800 665 0411 to learn about our services for your stock

Search   Follow Investorideas on Twitter   Investorideas is on Facebook   Investorideas is on Youtube   Investorideas is on Pinterest  Investorideas is on stocktwits   Investorideas is on tumblr   Investorideas is on LinkedIn   Investorideas Instagram   Investorideas Telegram   Investorideas Gettr   Investorideas RSS

Share on StockTwits

Stocks: No Correction Yet?


May 28, 2024 ( Newswire) Stock prices rebounded on Friday, with the S&P 500 index climbing back above the 5,300 level and gaining 0.70%. On Thursday, the market sold off after a higher open, despite NVDA stock rallying by over 9% following its earnings release.

On Friday, I asked "Is this a downward reversal or just quick profit-taking?" The market rebounded and retraced its Thursday daily loss of 0.7%, so there is still a chance that it is only a flat correction and a consolidation within an uptrend.

This morning, the S&P 500 index is likely to open 0.1% higher, as indicated by futures contracts after the long holiday weekend in the U.S. The market may see some more uncertainty as investors await the important CB Consumer Confidence release at 10:00 a.m.

Investor sentiment improved, as indicated by the last Wednesday's AAII Investor Sentiment Survey, which showed that 47.0% of individual investors are bullish, while 26.3% of them are bearish. The AAII sentiment is a contrary indicator in the sense that highly bullish readings may suggest excessive complacency and a lack of fear in the market. Conversely, bearish readings are favorable for market upturns.

The S&P 500 broke its upward trend line last week, as we can see on the daily chart.

S&P 500 Ended Week Unchanged

Compared to the previous Friday's closing price, the index gained just 0.03%, extending a consolidation along its new record high of 5,341.88.

Quoting an article from May 13: "The recent price action confirmed the importance of the 5,000 level as a medium-term support. It's hard to say whether the market will continue its long-term uptrend; however, it will most likely remain above 5,000 in the coming weeks or months."

Nasdaq 100 - Relatively Stronger

On Thursday, the technology-focused Nasdaq 100 index reached a new record high of 18,907.54 before closing 0.44% lower. It seemed that a more pronounced profit-taking action was coming; however, Friday's trading session closed 1.0% higher as the NVDA stock rally pushed the Nasdaq 100 back above the 18,800 level. Today, the Nasdaq 100 is likely to open 0.3% higher, outpacing the broader stock market again.

VIX Dipped Below 12 Again

The VIX index, also known as the fear gauge, is derived from option prices. In late March, it was trading around the 13 level. However, market volatility led to an increase in the VIX, and on April 19, it reached a local high of 21.4 - the highest since late October, signaling fear in the market. Recently, it was going lower again, and on Thursday, it was the lowest since November of 2019 at 11.52, before going above the 13 level. On Friday, it closed slightly below 12 following a rebound in stock prices.

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.

Futures Contract Trading Above 5,300

Let's take a look at the hourly chart of the S&P 500 futures contract. Last Thursday, it pulled back from a new record high of around 5,368 and fell by almost 100 points. However, Friday saw a rebound and this morning, the market is trading along the 5,330 level, with the resistance at 5,350, and the support at 5,300, among others.


Stock prices are likely to open slightly higher today, and the S&P 500 may extend its consolidation around the 5,300 level. Thursday's trading session might have led to a deeper correction; however, on Friday, the stock market advanced on technology sector strength. Despite Thursday's profit-taking, the overall weekly outcome has been relatively neutral, signaling a flat correction within the uptrend.

In my Stock Price Forecast for May, I noted "Where will the market go in May? There's a popular saying: 'Sell in May and go away,' but statistics don't consistently support such clear seasonal patterns or cycles. The safe bet for May is likely sideways trading, with investors digesting recent data suggesting that inflation may not be transitory, and the Fed could maintain its relatively tight monetary policy. However, economic data isn't entirely negative, and strong earnings from companies may continue to fuel the bull market."

For now, my short-term outlook remains neutral.

Here's the breakdown:

  • The S&P 500 extended its short-term consolidation despite Thursday's pull-back and a temporary fear factor for the market.
  • On Friday, April 19, stock prices were the lowest since February, indicating a correction of the medium-term advance. Recently, the S&P 500 retraced all of its mid-April sell-off, reaching new record highs above 5,300.
  • In my opinion, the short-term outlook is neutral.

The full version of today's analysis - today's Stock Trading Alert - is bigger than what you read above, and it includes the additional analysis of the Apple (AAPL) stock and the current S&P 500 futures contract position. I encourage you to subscribe and read the details today. Stocks Trading Alerts are also a part of our Diamond Package that includes Gold Trading Alerts and Oil Trading Alerts.

And if you're not yet on our free mailing list, I strongly encourage you to join it - you'll stay up-to-date with our free analyses that will still put you ahead of 99% of investors that don't have access to this information. Join our free stock newsletter today.

More Info: Newswire

This news is published on the Newswire - a global digital news source for investors and business leaders

Disclaimer/Disclosure: is a digital publisher of third party sourced news, articles and equity research as well as creates original content, including video, interviews and articles. Original content created by investorideas is protected by copyright laws other than syndication rights. Our site does not make recommendations for purchases or sale of stocks, services or products. Nothing on our sites should be construed as an offer or solicitation to buy or sell products or securities. All investing involves risk and possible losses. This site is currently compensated for news publication and distribution, social media and marketing, content creation and more. Disclosure is posted for each compensated news release, content published /created if required but otherwise the news was not compensated for and was published for the sole interest of our readers and followers. Contact management and IR of each company directly regarding specific questions.

More disclaimer info: Learn more about publishing your news release and our other news services on the newswire

Global investors must adhere to regulations of each country. Please read privacy policy:

That's all it takes to get an article published on Investor Ideas - Learn More