S&P 500 Attempts to Reach New Record

The S&P 500 index closed 0.25% lower on Monday after reaching a new local high above the 6,400 level. The market pulled back due to tariff-related uncertainty, valuation concerns, and other factors. Today, the index is expected to open 0.6% higher following the key Consumer Price Index release. The CPI came in as expected at +0.2% month-over-month.

Recently, the investor sentiment has deteriorated, as reflected in last Wednesday’s AAII Investor Sentiment Survey, which reported that 34.9% of individual investors are bullish, while 43.2% are bearish.

The S&P 500 stalled its advance after reaching the 6,400 area, as shown on the daily chart.

Nasdaq 100: New Record and a Pullback

The Nasdaq 100 lost 0.36% on Monday, retracing some of Friday’s 1.0% advance. The session started with a bit of optimism that soon faded. However, the technology index still managed to reach a new record high of 23,698.00.

Resistance remains around 24,000, with support at 23,200-23,300.

While there are no strong bearish signals yet, the recent price action may be forming a potential topping pattern.

Volatility Remains Low

Last Friday, the VIX (Volatility Index) dipped to a local low of 15.15, confirming reduced investor fear. Yesterday, it rebounded but remained near 16.

Recently, the decline in VIX reflected declining investor fear (declining gold prices indicate the same thing).

Historically, a dropping VIX indicates less fear in the market, and rising VIX accompanies stock market downturns. However, the lower the VIX, the higher the probability of the market’s downward reversal. Conversely, the higher the VIX, the higher the probability of the market’s upward reversal.

S&P 500 Futures Contract Faces More Fluctuations

This morning, the S&P 500 futures contract is trading above the 6,400 level, retesting its recent local highs.

Resistance is now around 6,450-6,470, with support now at 6,390-6,400.

Market Outlook: Cautiously Bullish

Stocks are set to open higher today, as the market digests the consumer inflation data. We are still in the midst of earnings releases, but economic data, tariff developments, and U.S.-Russia peace talks continue to play a role. The market appears to be consolidating after last week’s rebound.

Here’s what I think is most likely:

• The S&P 500 continues to fluctuate following last week’s rebound; CPI data is likely to push it higher again.
• My Volatility Breakout System flipped to a long position last week and is currently in profit.
• My long position in TSLA stock from mid-July remains very profitable.

What This Means for Your Portfolio

For individual investors, this environment calls for careful position management. While the market continues to advance, the combination of low volatility, seasonal weakness signals, and stretched valuations suggests that defensive positioning may become increasingly important in the weeks ahead.

The current market conditions highlight the value of having a systematic approach to investing rather than trying to time every market move. Whether you’re using technical systems like the Volatility Breakout System or following seasonal patterns, having a disciplined framework becomes crucial during uncertain times.

Thank you for reading my today’s free analysis. To stay up-to-date with my following analyses and get other premium details, I encourage you to sign up for my free mailing list today.

Thank you.

Paul Rejczak
Stock Trading Strategist