Stocks: Uncertainty following a recent run-up

Paul Rejczak Gold Price Forecast

The stock market has entered a consolidation phase after reaching a record high on Tuesday. Is this a topping pattern?

The S&P 500 index lost 0.47% on Thursday, extending Wednesday’s pullback but rebounding from its daily low of around 7,731. Today, the index is expected to open 0.4% higher as sentiment improves again, despite OpenAI’s weak revenue outlook.

Investor sentiment has improved, as reflected in Wednesday’s AAII Investor Sentiment Survey, which reported that 40.3% of individual investors are bullish, while 39.0% are bearish.

The S&P 500 index continues to trade near the 7,800 level, as shown on the daily chart.

S&P 500 futures contract: Uptrending again

This morning, the S&P 500 futures contract is trading higher, rebounding from its yesterday’s low of 7,783.

Resistance is at 7,860-7,880, while support is at 7,800-7,820, among other levels.

Market outlook: Uncertainty after reaching a new all-time high

The S&P 500 index is likely to recover further from yesterday’s pullback, extending the consolidation that began after the index reached a new all-time high on Tuesday.

Recent price action has remained relatively narrow, with AI-related stocks leading the major indices higher in recent weeks.

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 likely to continue its short-term rebound, with the AI sector and oil prices remaining in focus.
My Volatility Breakout System is currently long 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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