SUPERNEWS

Macro

S&P 500 Targets 5,200: Bullish Signals Abound

S&P 500 reaches all-time highs, technical indicators and market breadth suggest continued bullish sentiment with support around 5,050.

By Bill Bullington

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3/7, 20:24 EST
S&P 500
iShares 20+ Year Treasury Bond ETF
iShares 7-10 Year Treasury Bond ETF
APA Corporation

Key Takeaway

  • S&P 500 hits all-time highs, with technical indicators suggesting a bullish outlook and potential to top 5,200 before selling signals emerge.
  • Market breadth and low VIX levels support continued stock market strength; equity-only put-call ratios remain low, indicating bullish sentiment.
  • Conditional trading recommendations include buying calls for APA if it closes above $32.50 and QBTS April calls following an upside breakout.

Stock Market Hits All-Time Highs

The S&P 500 index reached all-time highs this week, with minor pullbacks being quickly filled. The index has found near-term support around 5,050, with a significant gap down to 4,983 that could potentially be filled. Despite being overbought, the market continues to show strength, with key support levels holding firm.

Technical Indicators and Market Breadth

The +4σ “modified Bollinger Band” is currently at 5,200, indicating an overbought market. However, a McMillan Volatility Band (MVB) sell signal is unlikely unless the index falls to 4,903. Equity-only put-call ratios remain low, supporting a bullish sentiment for stocks. Market breadth has been positive enough to avoid a sell signal, with cumulative volume breadth hitting new all-time highs.

VIX and Volatility Derivatives

The VIX remains at low levels, which historically has been bullish for stocks. The VIX "spike peak" buy signal is still in effect, indicating a positive outlook. Volatility derivatives, including VIX futures and CBOE Volatility Indices, continue to slope upwards, supporting a bullish stance for stocks.

Investment Recommendations and Conclusion

The market outlook remains positive, with a focus on dynamic portfolio management and selective allocations. Conditional recommendations for specific stocks and options are in place, with a strategic approach to capturing opportunities in the current market environment. Overall, the stock market continues to show strength, with technical indicators and market breadth supporting a bullish sentiment. Investors are advised to stay vigilant and actively manage their portfolios to capitalize on potential opportunities.