Stocks set to reach new records – Are they forming a top?

Paul Rejczak Gold Price Forecast

The stock market is expected to open higher today, but will the gains continue?

The S&P 500 index closed 0.66% higher on Monday, approaching the 7,800 level and its record high of 7,816.70, reached on August 13. Today, the market is expected to open around 0.5% higher, breaking above the 7,800 level as investors continue buying AI-related stocks.

Investor sentiment hasn’t changed much, as reflected in last Wednesday’s AAII Investor Sentiment Survey, which reported that 34.6% of individual investors are bullish, while 46.5% are bearish.

The S&P 500 index approached its previous record highs yesterday, as shown on the daily chart.

S&P 500 futures contract: Breaking above 7,800

This morning, the S&P 500 futures contract is trading higher, breaking above the 7,800 level and reaching new highs.

Resistance is now at 7,900, while support is at 7,800-7,820, among other levels.

Market outlook: Attempting to resume long-term uptrend

The S&P 500 index is likely to reach a new record high this morning as investors continue buying AI-related stocks in the hope that lending concerns will be resolved.

The ongoing Middle East conflict, elevated oil prices, and rising bond yields remain negative factors for the market.

Here's what I think is most likely:

The S&P 500 index is set to break higher today, potentially reaching a new record high on an AI-stock rally.
My Volatility Breakout System is currently short in the market.

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Author

Paul Rejczak

Gold Price Forecast

Paul Rejczak is a stock market strategist who has been known for the quality of his technical and fundamental analysis since the late nineties.

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