Technical Stock Market Briefing for Day & Swing Traders
| By Harry Boxer, Technical Market Analyst
Last week the S&P 500 and the NASDAQ edged their record levels higher again, posting fractional gains and recording their eighth positive week out of the past nine. The Dow climbed more than 1% but remained more than 2% below its record high set a month earlier.
However, chipmakers were among the market’s weakest areas as the PHLX Semiconductor Index (SOX) lost 1.1% loss for the week. Nvidia broke an eight-week winning streak with a 4% weekly slide, and chartists have noted potential technical “reversal” signs that could portend further declines. Still, it’s “too early to say” whether drops in Nvidia and other big tech shares signal a near-term price top. Next week we should have a better sense of whether tech needs to test lower levels before stabilizing.
Shares of banks, consumer staples, and utilities were also under pressure late in the week. Energy stocks were soft behind a drop in WTI Crude Oil (/CL) futures on Friday , but crude oil still surged 3.3% for the week after U.S. gasoline inventories unexpectedly fell. U.S. crude oil prices climbed above the $80-per-barrel level for just the second time since late April. On Friday afternoon, oil was trading around $81—up from a recent low of less than $73 on June 5.
Approaching the midpoint of 2024, the U.S. stock market’s top-performing sectors are the same pair that led the market in 2023. Information technology led year to date with a nearly 29% average return followed by communication services with 25%. In full-year 2023, information technology’s average return was about 58% and communication services posted 56%.
Investor sentiment is still very optimistic, driven by a boom in artificial intelligence (AI) stocks.
Last week, Nvidia unseated Microsoft as the world’s most valuable company, with a market capitalization 30% larger than the entire small-cap universe. Excitement around AI is driving market concentration higher but is also increasing the risk that a mania may be or already has developed. ( However, as noted above Nivdia then reversed to the downside and ended the week poorly) Bearish sign? I think a strong possibility, but the week ahead appears to be critical in determining the shorter term direction for the markets
In any case, it’s always advisable to closely monitor the technicals and “Trade What You See, Not What You Think”
Get Live Market Guidance As It Happens
Start a FREE trial 10-day Trial And Gain VIP Access To The Tech Trader Today
Gain instant access to the live trading room where Harry share’s his pre-market focus list, live market analysis, recommendations and commentary from market open to close, along with livestream webinar.
