Bulls Continue Record Run 

The stock market continued its record run after tagging another round of all-time highs on Friday following the mid-week rate cut by the Fed. The bullishness off the April 7th lows has now created several of support the bears need to crack before the major indexes start to show signs of topping out.  

The Nasdaq kissed an all-time intraday peak of 22,645 while closing at 22,631 (+0.7%). Undefined resistance at 22,500 was topped and held. Support is at 22,000.

The S&P 500 ended at 6,664 (+0.5%) after testing a record high of 6,671. Fresh resistance at 6,650 was cleared and held. Support is at 6,600.

The Dow traded up to a record high of 46,396 before closing at 46,315 (+0.4%). New resistance at 46,250 was tripped and held. Support is at 45,750.

Earnings and Economic News

Before the open: Marti Technologies (MRT)

After the close: Firefly Aerospace (FLY), Genfit (GNFT)

Economic News

None

Technical Outlook and Market Thoughts 

For the week, the Nasdaq rose 2.2% and the S&P gained 1.2%. The Dow was up 1% while the Russell rallied 2.1%. Year-to-date, the Nasdaq has advanced 17.2% and the S&P has popped 13.3%. The Dow is high by 8.9% and the Russell is up over 9%, for 2025.

The Russell 2000 cleared, but just missed holding key resistance at 2,450 on Friday after topping out at 2,472. The lower close was uninspiring as the all-time high from last November at 2,466 was cleared on Thursday. Our 2025 price target for the index from February 23rd, 2024 is at 2,500 and is now firmly in play. It is imperative the index clears and holds 2,475-2,500 for several sessions this upcoming week to avoid a possible near-term top, and more importantly, a triple top breakdown. The previous high from last November was at 2,466 and before that it was 2,458 from November 2021.

Current support is 2,400 with backup at 2,375. If 2,375 fails to hold on a close, there is risk to 2,339 followed by 2,300 and the 50-day moving average.

The Nasdaq tagged a lifetime peak of 22,645 with fresh resistance at 22,500 getting cleared and holding. Continued closes above this level keeps upside to 23,000-23,250 on our revised price targets from August 11th. Our previous targets for the index had been at 20,000 when the index was at 15,996 on February 23rd, 2024 and 22,000 this past January.

Support is at 22,000 followed by 21,750-21,500. A move below the latter and the 50-day moving average would be a slightly bearish signal with weakness towards 21,000.

The S&P 500 also set a new record high of 6,671 with resistance at 6,650 getting cleared and holding. We said on August 11th that closes above 6,500 would be bullish for ongoing strength towards 6,700-6,750. 

Support is at 6,600-6,550. A close below the latter likely leads to a retest to 6,500-6,350 and the 50-day moving average. The aforementioned levels were our price targets for the index when it was at 5,088 on February 23, 2004.

The Dow hit an intraday record high of 46,396 on Friday with undefined and lower resistance at 46,250-46,500 getting cleared and holding. A close above the latter would imply ongoing upside to 47,000-47,250. Our Price Target from February 23rd, 2024 for the blue-chips is at 50,000. 

Key support at 45,750. A close below this level reopens downside risk to 45,000 and the 50-day moving average. A close below these levels would signal a near-term top with additional weakness down to 44,000.

The Volatility Index (VIX) closed above its 50-day moving average on Tuesday with Wednesday’s peak 16.75. Key resistance at 17.50 easily held. More important resistance for the bears is at 19.25 and the 200-day moving average followed by 20. A close above 20 would be a very bearish sign for the bulls and the overall market.

Support is at 15 followed by 14.25-14. There is still a chance 13.50-12.75 comes into play on closes below the latter. Last week’s low was at 14.33 with the August 28th bottom at 14.12.

The relative strength index (RSI) levels for the major indexes have cleared 70 and overbought territory. The Nasdaq’s RSI is the highest at 74.69 while the S&P’s RSI is at 72. The Russell’s RSI pushed 72 before closing at 66 on Friday while the Dow’s RSI was last seen at 65.

Economic news is somewhat light this week so we wouldn’t be surprised to see higher highs to start the week followed by a pullback. Our August 11th price targets remain in play and could very well represent possible peaks for the major indexes. 

Third-quarter earnings season will start in October and we wouldn’t be surprised to see extended trading ranges for the major indexes for the rest of the month. We have been mentioning the bears have several layers of support they need to crack before we can say a near-term market top is in.

The regular monthly October options have 25 days before expiration on Monday’s open. The regular monthly November options have 60 days before expiration.