SP500’s 47th All-Time-high | Stock Market Technical Analysis | Episode 258

By Jason McIntosh | 26 October 2024

S&P 500 Hits New All-Time Highs: Understanding Market Trends and Future Outlook

The S&P 500 has recently reached its 47th all-time high this year, sparking discussions about market trends and future performance. While this number might seem extreme, historical data provides valuable context and insights for investors.

All-Time Highs: A Historical Perspective

The record for most all-time highs in a single year stands at 75, set in 1995. Contrary to expectations, this didn’t lead to an immediate market cool-down. In fact:

• 1996 saw 39 new all-time highs
• 1997 recorded 45 all-time highs
• This trend continued for several more years

This pattern demonstrates that all-time highs tend to cluster, reflecting the nature of upward market trends. While corrections and pullbacks occur, the underlying trend often remains positive during these periods.

Current Market Analysis

S&P 500

The S&P 500 has experienced a pullback from last week’s all-time high, but the overall upward trend remains intact. Key indicators include:

• Rising moving averages (50-day and 100-day)
• Price above these moving averages
• A series of higher highs and higher lows

This price action, by definition, is bullish. While there’s potential for several weeks of consolidation, possibly retesting the 50-day moving average, the current data suggests the path of least resistance is still upward.

Equal-Weight S&P 500

The equal-weight S&P 500 index also displays a bullish framework:

• Rising moving averages
• Price above these averages

For a bearish scenario to develop, we would need to see:

1. Price decline below moving averages
2. A period of consolidation beneath these averages

This would create a vulnerable structure, similar to what occurred in 2001.

Russell 2000: Small Cap Outlook

The Russell 2000, representing small-cap stocks, shows promising signs:

• Building along the 50-day moving average
• A sequence of rising lows
• Recent rising highs

The key level to watch is around 2,300. A break above this could trigger new long positions and potentially lead to all-time highs in the coming months.

Conclusion

While the market has seen numerous all-time highs this year, historical data and current trends suggest that the bullish momentum may continue. However, investors should remain vigilant, manage risk, and be prepared for potential consolidations or corrections within the broader uptrend. Remember, past performance doesn’t guarantee future results. Always conduct thorough research and consider consulting with a financial advisor before making investment decisions.

****

Looking for the best ASX stocks to buy now?

Motion Trader‘s algorithms scan more than 2,000 ASX stocks daily in search of medium term investment trends. We then tell our members precisely when to buy shares. And most importantly, we tell them when to sell.

Try a no obligation FREE 14-day trial of Motion Trader, and see what an algorithmic trading approach could do for you.

****

SP500 Strategy Session Video

00:00 Intro

00:40 An IMPORTANT announcement

01:07 SP500 pulls back (is there more to it?)

01:35 What you should know about this year’s 47th record high

02:30 This can happen after a run of all-time-highs

04:15 Don’t overlook these key facts in play right now

05:30 This is what the bears are looking for

06:45 Look at this structure in small caps (be ready)

Trade the Trend is a weekly video focusing on where the stock market is going. It’s for investors and traders looking for technical analysis of the ASX stocks, the ASX200, the SP500, as well as stock markets and commodities markets in general. Jason uses technical analysis of stocks and trend following techniques to help you piece together the world’s biggest puzzle.