{"id":36694,"date":"2023-07-17T08:37:48","date_gmt":"2023-07-17T12:37:48","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/the-sp-500-is-hot-the-nasdaq-is-even-hotter-says-strategist-how-traders-are-bracing-for-a-pullback\/"},"modified":"2023-07-17T08:37:49","modified_gmt":"2023-07-17T12:37:49","slug":"the-sp-500-is-hot-the-nasdaq-is-even-hotter-says-strategist-how-traders-are-bracing-for-a-pullback","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=36694","title":{"rendered":"The \u2018S&P 500 is hot, the Nasdaq is even hotter,\u2019 says strategist. How traders are bracing for a pullback."},"content":{"rendered":"

Can the S&P 500
\n SPX,
\n -0.10%<\/bg-quote>
\n bounce back after breaking a four-session win streak? That\u2019s what some are wondering as a new trading stretch begins.<\/p>\n

Last week saw the index also reach 4,500, a level not seen since April 2022. That\u2019s against the backdrop of an earnings season that some say may not drive up stocks as it has in the past, as we\u2019ve already had a big rally.<\/p>\n

\n

Enter our call of the day<\/strong> from Ed Yardeni, founder and president of Yardeni Research. \u201cThe S&P 500 is hot. The Nasdaq is even hotter. The mounting concern is that both might be getting too hot, resulting in a stock market meltup that could set the stage for a meltdown,\u201d he tells clients in a note. <\/p>\n

Yardeni, who correctly called the S&P 500\u2019s Oct. 12 closing low would mark a lasting bottom, believes any pullback will be a correction, not a new bear market beginning, as his firm sees just a 25% chance of recession in the next two and a half years. <\/p>\n

He expects the bull market that began last October will last until \u201cat least the end of next year,\u201d bringing with it a fresh record high for the S&P 500 of between 4800 and 5400 in the next 18 months. The S&P 500
\n SP500.452020,
\n +0.03%<\/bg-quote>,<\/span>
\n S&P 400
\n SP400.45,
\n -1.76%<\/bg-quote>
\n and S&P 600
\n SP600.45,
\n -1.60%<\/bg-quote>
\n information tech indexes will led the way, he adds, noting the below chart that shows all three poised for new highs:<\/p>\n

<\/p>\n
<\/p>\n<\/figure><\/div>\n

More correction chatter comes from Kobeissi Letter\u2019s\u00a0editor in chief and founder, Adam Kobeissi, who also says \u201ca pullback is long overdue.\u201d He said they shifted to bearish last week after cashing in on a bullish setup for the index. <\/p>\n

The S&P 500 pushed above its 4511 daily top Bollinger Band on July 14, while the daily relative strength index is also signalling \u201cseverely overbought technical conditions,\u201d said Kobeissi.<\/p>\n

Bollinger bands are a technical tool that puts a band 2 standard deviations above and below a simple moving average. Signs of an overbought asset come with a move above that top band. The RSI indicator is often used to confirm what Bollinger bands are saying. <\/p>\n

Last word goes to trader \u201cTom\u201d from the \u201cLines on a Chart\u201d substack, who says an \u201ceveryone is in the pool,\u201d moment has arrived. He points to the CNN Fear & Greed Index, which he says on Tuesday will likely show six straight weeks of \u201cimmersion in a euphoria fueled market.\u201d <\/p>\n

He mixes in the NAAIM Exposure Index, which gives insight on active fund managers positioning, \u201cnoting that simultaneous presence of extreme greed and heightened exposure has historically preceded significant market declines.\u201d<\/p>\n

<\/p>\n
<\/p>\n<\/figure><\/div>\n

Tom expects the S&P 500 will initially correct toward 3,950 to 4,100. \u201cIt is within this range that I find it most appealing to contemplate establishing positions and sizing long trades,\u201d he said. <\/p>\n

He says those above index levels correspond with key points on the volume profile, and represent spots where the highest trade has been since the 2022 peak, and should provide support for the index during any decline. Read more from Tom here.<\/p>\n

<\/p>\n
<\/p>\n<\/figure><\/div>\n

The markets<\/h2>\n
<\/p>\n
<\/p>\n<\/figure><\/div>\n

Stock futures
\n ES00,
\n -0.12%<\/bg-quote><\/p>\n

YM00,
\n -0.22%<\/bg-quote><\/p>\n

NQ00,
\n +0.01%<\/bg-quote>
\n are lower, along with Treasury yields
\n TMUBMUSD10Y,
\n 3.812%<\/bg-quote><\/p>\n

TMUBMUSD02Y,
\n 4.738%<\/bg-quote>.<\/span>
\n Wheat prices
\n W00,
\n +2.61%<\/bg-quote>
\n are climbing after Russia said it\u2019s pulling out of the Black Sea grain deal.<\/p>\n

Don\u2019t miss:<\/strong> Hottest place on Earth a draw for tourists even amid sweltering summer<\/p>\n

For more market updates plus actionable trade ideas for stocks, options and crypto,\u00a0subscribe to\u00a0MarketDiem by Investor\u2019s Business Daily.<\/strong><\/p>\n

The buzz<\/h2>\n

Lockheed Martin
\n LMT,
\n -0.44%<\/bg-quote>,<\/span>
\n Bank of New York Mellon
\n BK,
\n -6.65%<\/bg-quote>,<\/span>
\n Bank of America
\n BAC,
\n -1.89%<\/bg-quote>
\n and Morgan Stanley
\n MS,
\n -0.50%<\/bg-quote>
\n will report on Tuesday, with Tesla
\n TSLA,
\n +1.25%<\/bg-quote>,<\/span>
\n Netflix
\n NFLX,
\n -1.88%<\/bg-quote>
\n and IBM
\n IBM,
\n -0.39%<\/bg-quote>
\n on Wednesday and others scattered throughout the week.<\/p>\n

Read:<\/strong> After years of delays, Tesla builds its first Cybertruck<\/p>\n

Activision Blizzard shares
\n ATVI,
\n +0.59%<\/bg-quote>
\n rose after winning a second case against the Federal Trade Commission in court, as Microsoft
\n MSFT,
\n +0.75%<\/bg-quote>
\n reached a deal with Sony on Activision\u2019s Call of Duty game.<\/p>\n

A New York-area survey of manufacturing conditions came in stronger than expected with a gain of 1.1%. Retail sales and housing market data will also be on offer this week.<\/p>\n

The best of the web<\/h2>\n

South Korea\u2019s own \u201cmeme\u201d retail traders have taken on hedge funds to drive up shares of a battery materials producer.<\/p>\n

How Greta Gerwig turned the \u2018Barbie\u2019 movie into her dream job.<\/p>\n

EVs may help power homes during blackouts.<\/p>\n

The chart<\/h2>\n

Cathie Wood\u2019s flagship ARK Innovation exchange-traded fund
\n ARKK,
\n -2.14%<\/bg-quote>
\n has gone through a multiyear boom\/bust phase that has left it now trading below pre-2020 levels. However, this recent chart from Larry Thompson of @HostileCharts <\/a>suggests fortunes may be about to change for that tech fund:<\/p>\n

<\/p>\n
<\/p>\n<\/figure><\/div>\n

The tickers<\/h2>\n

These were the top-searched tickers on MarketWatch as of 6 a.m.:<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n
\n Ticker<\/p>\n<\/td>\n\n Security name<\/p>\n<\/td>\n<\/tr>\n
\n TSLA,
\n +1.25%<\/bg-quote>\n <\/td>\n		\n Tesla<\/p>\n<\/td>\n<\/tr>\n
\n MULN,
\n <\/bg-quote>\n <\/td>\n		\n Mullen Automotive<\/p>\n<\/td>\n<\/tr>\n
\n NVDA,
\n -1.10%<\/bg-quote>\n <\/td>\n		\n Nvidia<\/p>\n<\/td>\n<\/tr>\n
\n NIO,
\n -2.04%<\/bg-quote>\n <\/td>\n		\n Nio<\/p>\n<\/td>\n<\/tr>\n
\n NKLA,
\n +1.35%<\/bg-quote>\n <\/td>\n		\n Nikola<\/p>\n<\/td>\n<\/tr>\n
\n AMC,
\n -2.48%<\/bg-quote>\n <\/td>\n		\n AMC Entertainment<\/p>\n<\/td>\n<\/tr>\n
\n AAPL,
\n +0.08%<\/bg-quote>\n <\/td>\n		\n Apple<\/p>\n<\/td>\n<\/tr>\n
\n GME,
\n -2.09%<\/bg-quote>\n <\/td>\n		\n Gamestop<\/p>\n<\/td>\n<\/tr>\n
\n TAI,
\n +50.00%<\/bg-quote>\n <\/td>\n		\n Talmora Diamond<\/p>\n<\/td>\n<\/tr>\n
\n AMZN,
\n +0.28%<\/bg-quote>\n <\/td>\n		\n Amazon.com<\/p>\n<\/td>\n<\/tr>\n<\/table>\n

Random reads<\/h2>\n

Glam dogs, athletic cats vie for comedic pet photo awards.<\/p>\n

Two young brothers build model ships to circumnavigate\u00a0Antarctica<\/p>\n

Hottest place on earth has no shortage of tourists<\/p>\n

Need to Know starts early and is updated until the opening bell, but\u00a0sign up here\u00a0to get it delivered once to your email box. The emailed version will be sent out at about 7:30 a.m. Eastern.<\/strong><\/p>\n

Listen to the\u00a0Best New Ideas in Money podcast\u00a0with MarketWatch reporter Charles Passy and economist Stephanie Kelton.<\/strong><\/p>\n<\/p><\/div>\n