Technical Stock Market Briefing for Day & Swing Traders
| By Harry Boxer, Technical Market Analyst
The major U.S. stock indexes gained over 1% in a holiday-shortened trading week, extending the prior week’s positive momentum.
The S&P 500 and Dow reached new record levels, while the NASDAQ finished slightly below its all-time high set three weeks earlier.
In November, U.S. stock indexes surged, marking the sixth positive month out of the last seven and recovering from a modestly negative October.
The Dow gained approximately 7.5%, the NASDAQ climbed 6.2%, and the S&P 500 advanced 5.7%.
While 2024 has seen its share of market volatility, it has been largely subdued overall. Inflation worries flared in April, concerns about labor market weakness and tech stock growth surfaced in early August and September, and October delivered its typical pre-election volatility. However, these episodes were relatively brief and mild.
This year, multiple asset classes have achieved numerous all-time highs. The Russell 2000 Index hit an all-time high last Monday, its first since 2021, while the S&P 500 has set over 50 new records this year. Notably, the S&P 500 has experienced only three daily declines of 2% or more, significantly below the 10-year average of nearly nine per year.
The exceptional performance of U.S. stocks in 2023 and 2024 can largely be attributed to significant gains in a small group of tech-focused mega-cap stocks.
These stocks’ heavy weighting has amplified their influence on popular indexes like the S&P 500, resulting in historic index concentration. Today, the top 10 companies in the S&P 500 account for nearly 35% of the index.
Recently, market leadership has expanded beyond this narrow group of large-cap tech stocks, providing a healthier environment for the bull market’s momentum to persist. Financials have surged over 50% in the past 12 months, overtaking previously dominant sectors like technology, consumer discretionary, and communication services. Industrials and utilities have also seen notable gains, both rising over 30% in the same period.
Additionally, asset class leadership has rotated, with U.S. small- and mid-cap stocks outperforming over the past 12 months, driven by strong performance since the fourth quarter began.
In the short term, I’ll be closely monitoring key S&P 500 support levels near 5850–5860, 5695–5700, and my “line in the sand” at 5650. A sharp break below 5650 could signal a more bearish trend. Stay tuned!
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