S&P 500 and Nasdaq 100: Highly Positive Mood presents a Small Danger of potential setbacks, due their ‘Over Bought’ status on the charts

S&P 500 and Nasdaq 100 Key Points to Consider

The S&P 500 and Nasdaq 100 continues to set fresh tops so far.

Although there’s not much evidence of a turnaround, confidence is strong despite overloaded positions.

As a result of the rise, US stock indices keep hitting new year-to-date peaks. Excessive excitement, overvalued circumstances. With congested posture, on the other hand, represent a modest letdown risk, particularly if results miss.

The CNN Index of Fear & Greed index peaked at 84 on Tuesday prior to falling somewhat, Yet, it remains around values which have previously sparked if not some form of decline. Notably last Dec 2022, Feb 2023, then June 2023. At this point, market variety seems to be poor as evaluated by cyclic aspects.

S&P 500 Fractal Proportions

The spread of variety is measured using fractal proportions. When the measure reaches its bottom linked. Which is often 1.25-1.30 subject to market conditions, It reveals exceptionally little range since market players gamble in the identical path. Increasing the likelihood for a minimum of a stop/turnaround. Below 65-day fractal component of the Nasdaq 100 headed under the 1.25 limit, raising a warning.

July and September has typically been the lowest month in the calendar cycle. Considering the present rapid gain. Should profits miss to meet or surpass desires. Current year could be similar. Mainstream forecasts indicate that the present report cycle will mark a low point for earnings. This does not correspond to mainstream US economic expansion predictions.

The Ambiguity Still Looms on The Market

Worries among investors about increasing interest rates, decreasing revenue growth. While stubbornly high prices have waned lately. With an unstable regional financial meltdown early in 2023 proven to be brief. Thus far in 2023, technology companies, growth-oriented stocks, even cryptocurrencies have outperformed. As investors’ hunger for risky assets is back.

Inflation appears to be levelling down in the second half of 2023. Experts and analysts are afraid that the Fed’s struggle over price increases is not entirely done, which means a U.S. downturn remains possible.

While markets applauded the Fed’s break in June.  The debt market is factoring in a 84.3 percent likelihood that the FOMC will continue tightness and hike rates by 25 bps.

Technical Outlook

The Nasdaq 100 is oversold, but there is no evidence of a correction.

The Nasdaq index’s trajectory stays upward on technical graphs. The daily as well as weekly diagrams continue to trend higher. Although the monthly graph appears weak in comparison with the fifty per cent surge from October last.

Given, the value movement is still developing, and strength on the upper period graphs might increase more. However, it is a component to keep an eye upon. A lack of momentum to climb over upper period charting might suggest that the rebound after this time last year. Had been remedial (section of a larger adjustment that began in 2022), rather than the restart of an ongoing bulls trend.

Initial support is located close to the 30-day MA, near its mid-June top of 15285 mark. The 89-day MA (which is currently around 14000) provides additional protection.

The S&P 500 is still in an upward trajectory, yet there is a roadblock coming.

The S&P 500 index’s pattern, similar the Nasdaq 100 index’s, stays upwards. However, the S&P 500 index looks to be bowing to tough opposition over the median contour of a forked wave through its conclusion of 2022.

Nevertheless, no signs of a turnaround are visible as the index proceeds to set fresh so far this year peaks. Until and unless there’s a price verification. The route of lowest resistance will continue laterally to upwards. Nearby support appears near the middle of June top of 4450 mark. That is close to the 30-day MA and has performed as sturdy ground throughout the uptrend started in March.

As a result, a shift under could mean that the upward pull has momentarily receded. In the daily graph, a break beneath the lowest point of the channel, about near its low border of the Ichimoku cloud, puts the 9-month upswing at danger. Assuming support holds, the S&P 500 might challenge its April 2022 top of 4637 level. As well as the year 2022 record-setting peak of 4819 peak.

Caution

The following few months will almost certainly be pivotal for the US central bank & the overall economy. Despite inflation appears to be progressively declining, experts have reservations that inflation could remain greater than what the market anticipates.