S&P500 and Nasdaq Index: AI Tech Stocks Drive Benchmarks to Record Highs

S&P 500, Nasdaq Hit Record Highs

Mid-session Monday, the S&P 500 and Nasdaq Composite are at records. Nobody is running to get in. The Dow is down slightly. That split tells you what kind of day this is. It’s not a rally. It’s a grind at the top.

Technical Outlook

The main trend is up according to the swing chart and my Gann angles. Those are two of the three factors I will be monitoring for trend changes. The third is the closing price reversal top. I write about that nearly every day because we are in my window of time for a top. It’s a pretty clear new move high, lower-close, close below the opening and close below the mid-point of the trading day chart pattern.

It can be used in conjunction with the Stochastics and RSI because both of those use the close in the equation. Since it involves a lower-close, it will often show up as a divergence on the Stochastics and RSI chart. So, if you don’t want to look for patterns, you can just watch those indicators.

The SPX hit a new record at 7175.84 and the minor pivot at 7111.20 moved up. That’s first support. I call that my trailing 50% level because it moves every time a new high is formed. It’s a key area for technical bounces after a new high because traders who bought the actual high usually look for a price to average down, and that tends to be it. By the way, I don’t recommend that strategy, but I do like this level as a clean, quick trade.

If the first support fails, the break should take us into the first Gann angle at 7082.00. Again, a technical bounce is likely in order, but this time, if it fails, we could see a break into the minor bottom at 7046.55. If this fails, the minor trend will change to down and momentum will shift to the downside.

I’m not trying to pick a top. The uptrend is too strong. Furthermore, there is no clear resistance, only Fibonacci extensions, and I don’t have any chart points on the left to lean on. So where I come from, the trade is just a guess. However, letting the market stop at a Fibonacci target then selling weakness could prove to be attractive. Anybody who’s played soccer knows it’s hard to aim a rolling ball. Trap the market first, then try to pick a top if that’s your preference. Try to avoid selling it on the way up. Besides, if you don’t know your exit first, why bother to trade?

Oil Is the Ceiling

The way I see it, crude is the reason this market can’t fully extend. June WTI crude oil is holding above $96 and Spot Brent crude oil is above $109. Nobody is solving Iran or reopening the Strait today, and traders know it. Higher energy costs hit earnings expectations fast. We’re sitting at record highs, but crude is the ceiling right now, and crude isn’t budging.

Technology Carries the Day

The Nasdaq record belongs to AI names. SanDisk is up. Qualcomm is up. A handful of chip and memory stocks are pulling the index while the rest of the market sits. That’s the whole story. A short list is doing all the work.

Stocks in the News

Verizon is up on a solid update. Snap is higher. Lionsgate is catching a bid after a strong weekend at the box office. That’s the good side. AMD got downgraded and it shows. Domino’s is lower on soft sales. The scoreboard today is split, and a split scoreboard is not a broad rally.

What to Watch

Big tech earnings are still coming. Those prints either keep the AI trade alive or they don’t. I’m also watching crude. June WTI stays above $97, this market has a hard ceiling. One Middle East headline moves both. Know which way you’re positioned before it hits.

More Information in our Economic Calendar.