Markets Hit New Highs as Tech Leads; Golden Cross Signals Bullish Momentum

Technical Stock Market Briefing for Day & Swing Traders
| By Harry Boxer, Technical Market Analyst

Markets Hit New Highs with Growth Leading the Charge

Stock markets made new all-time highs last week. Overall, the three indexes were up around 2.0% in a holiday-shortened trading week, with both the S&P 500 and technology-heavy Nasdaq up about 5% year-to-date. Since the April lows, the S&P 500 and Nasdaq have rebounded 24% and 33%, respectively.

An index that tracks U.S. small-cap stocks outperformed a large-cap benchmark and returned to positive territory on a year-to-date basis. For the week, the Russell 2000 Index climbed 3.6%, nearly 28% above a recent low recorded on April 8.

U.S. stock indexes finished this year’s second quarter with big gains despite April’s tariff-driven market decline. The S&P 500 climbed 10.6% overall after posting monthly gains of 6.2% in May and 5.0% in June. On a year-to-date basis, the index was up 5.5% as the quarter closed on Monday.

The relatively stronger rally in the mega-cap technology sector is the main driving technical force at this time. The renewed momentum in the technology and growth parts of the stock market is clear. In fact, while the broader S&P 500 is up about 24% since the April 8 lows, growth sectors like technology, communication services, and consumer discretionary are up well beyond this in some cases.

Bullish Technical Signals but Overbought Risks Loom

Technically, the S&P 500 index (SPX) saw a positive development on the charts this week as its 50-day moving average climbed above the 200-day moving average for the first time since early April. That’s known as a golden cross, and it’s a technical signal that many traders consider bullish. The index is up 25% from the April low, but less than 6% year to date. When the 50-day crosses above the 200-day, it’s usually seen as a positive technical signal.

While momentum is likely on the trader’s side in the near term, in the weeks ahead, the markets will have to digest tariff and trade updates and potentially softer economic data. Markets may experience more bouts of volatility as a result.

Since the oscillators and several other closely followed technical indicators are nearing the overbought levels we’ve seen near market tops in the past few years, it’s quite logical to expect pullbacks or retests of key underlying support levels in the weeks ahead.

Oil Pulls Back, Rate Cuts Priced In

U.S. WTI crude oil, which had risen over 20% in June to $75 per barrel, fell about 13% last week, down to around $65 per barrel. This fall in oil and energy has appeared to support market sentiment in recent days as well, helping drive equity markets to new highs.

Markets are now pricing in two or three rate cuts in 2025, according to CME FedWatch. And Treasury yields across the curve have moved lower, with both 2-year and 10-year yields well below highs from earlier this year. These moves lower in interest rates are positive for consumers and corporations and supportive of better stock market sentiment broadly.

In any case, we at thetechtrader.com will always “Trade What We See, Not What We Think.”

*No credit card required