{"id":1204,"date":"2024-06-29T00:02:52","date_gmt":"2024-06-29T00:02:52","guid":{"rendered":"https:\/\/tradetrovex.com\/index.php\/2024\/06\/29\/can-the-sp-500-move-meaningfully-higher-without-nvda\/"},"modified":"2024-06-29T00:02:52","modified_gmt":"2024-06-29T00:02:52","slug":"can-the-sp-500-move-meaningfully-higher-without-nvda","status":"publish","type":"post","link":"https:\/\/tradetrovex.com\/index.php\/2024\/06\/29\/can-the-sp-500-move-meaningfully-higher-without-nvda\/","title":{"rendered":"Can the S&P 500 Move Meaningfully Higher Without NVDA?"},"content":{"rendered":"
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2024 has been a year marked by exceptional returns for a relatively small number of high-flying growth stocks.\u00a0In recent weeks, top performers like Nvidia (NVDA) have pulled back, and Super Micro Computer (SMCI) remains well below its all-time high from earlier this year.\u00a0So can the major equity benchmarks continue their Q2 strength if these stocks are not breaking out?<\/p>\n

First, let\u2019s review the market conditions as defined by the performance of the S&P 500 index.<\/p>\n

Friday\u2019s session, which initially showed a strong upside reaction after the release of the latest data for the Fed\u2019s favorite measure of inflation, ended up showing weakness as the S&P failed to close above the 5500 level.\u00a0We remain constructive on the SPX as long as it remains above our \u201cline in the sand\u201d of 5400, which lines up well with trendline support using the major market lows back to October 2023.<\/p>\n

I\u2019m meeting up with my <\/em>Market Misbehavior premium members<\/em><\/a> on Tuesday, July 2nd, to conduct our virtual Monthly Chart Review of key charts to watch in Q3.\u00a0I\u2019d love for you to join us in this interactive discussion of market conditions!\u00a0Find more info <\/em>HERE<\/em><\/a> and use code <\/em>STOCKCHARTS<\/em><\/strong> at checkout for 20% off your first 12 months.<\/em><\/p>\n

Looking a little closer at some of the top performers in 2024, we can see that some names have dramatically outperformed the SPX in the first half of the year.\u00a0SMCI is up almost 200% year-to-date, Nvidia has gained around 150%, and the rest of the top ten are all over 50% compared to the S&P 500\u2019s +15% return.<\/p>\n<\/p>\n

A small number of these strong performers are still pounding out new highs.\u00a0For example, Eli Lilly (LLY) closed above $900 for the first time<\/a> this month, continuing a run of incredible strength off its April low.\u00a0But the real story is that many of these top performers are actually well off their 2024 highs.<\/span><\/p>\n

NVDA spent this week about 10-15% below its all-time high earlier in June, while Super Micro Computer is still about 30% below its peak above $1200 in March.\u00a0So the \u201cbest of the best\u201d performers are not necessarily screaming strength going into Q3.<\/p>\n

So which charts should we be watching going into July, which has traditionally been a very strong month<\/a> for the S&P 500?<\/span><\/p>\n

I hereby present the three charts I\u2019ll be focused on, which I call the \u201cMAG\u201d stocks: Meta Platforms (META), Amazon.com (AMZN), and Alphabet (GOOGL).\u00a0All three are at key technical moments, and all three have the opportunity to either confirm a new market uptrend or raise a red flag of caution.\u00a0Let\u2019s break them down one by one.<\/p>\n<\/p>\n

The question for META is whether it can trade not just to resistance but through resistance.\u00a0Meta Platforms first reached $125 in March, then retested that resistance level again in April and once again in June.\u00a0When price reaches a key resistance level, it\u2019s all about whether an influx of willing buyers can push the price to new highs.\u00a0This increase in buying power is what could propel META to new highs, which would certainly help the S&P 500 and Nasdaq achieve further highs.<\/p>\n<\/p>\n

Amazon.com has already broken to new highs earlier in the week, but Friday\u2019s session saw this leading consumer name pullback toward the breakout level at $190.\u00a0For a chart like AMZN, it\u2019s all about whether we can remain above the breakout level.\u00a0Amazon over $190 is a strong chart with a recent breakout, but Amazon below $190 would represent a failed breakout and lack of upside follow-through.<\/p>\n<\/p>\n

In Alphabet, we see a stock very clearly in a primary uptrend of higher highs and higher lows.\u00a0Can GOOGL sustain the strong bull phase from Q2 into Q3?\u00a0With this sort of technical configuration, I\u2019m watching the pullbacks to see if GOOGL can keep making higher lows.\u00a0My mentor Ralph Acampora would remind me to focus on higher lows in an uptrend, because, as long as the lows keep getting higher, the uptrend appears to be in good shape.<\/p>\n

I\u2019m also watching the RSI, which has been above 50 since mid-March.\u00a0Strong charts have strong momentum, and RSI remaining above 50 would tell me that Alphabet is still in a position of strength among the largest US stocks.<\/p>\n

So even though top performers like Nvidia have pulled back, our major equity benchmarks can certainly drive higher.\u00a0But it will fall to charts like the MAG stocks to demonstrate that investors remain optimistic, and that the optimism is reflected in rising stock prices.\u00a0Because as long as leading growth names keep leading, this market has plenty of upside potential.<\/p>\n

<\/div>\n

RR#6,<\/p>\n

Dave<\/p>\n

P.S.<\/strong> Ready to upgrade your investment process?\u00a0Check out my free behavioral investing course<\/a>!<\/span><\/p>\n

David Keller, CMT<\/strong><\/p>\n

Chief Market Strategist<\/p>\n

StockCharts.com<\/p>\n

Disclaimer: <\/em><\/strong>This blog is for educational purposes only and should not be construed as financial advice.\u00a0The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.<\/em><\/p>\n

The author does not have a position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author and do not in any way represent the views or opinions of any other person or entity.<\/em><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

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