The S&P 500 futures chart is showing a similar pattern. We witnessed a breakout, albeit a weaker one. It’s important to note that the S&P 500 didn’t decline as much as the NASDAQ, resulting in smaller overall moves both down and up.
We observed a bullish cross on the stochastic, but it didn’t quite reach oversold conditions, hovering just above them. Ideally, I would have liked to see the S&P 500 dip a bit more to hit oversold levels, but the strength of the Dow Jones and old economy stocks provided stability to the S&P 500.
In terms of the near-term technical setup, it appears to be forming a cup pattern on the S&P 500. Zooming out, it actually resembles a large bull flag.
Overall, the outlook remains bullish. However, in the coming weeks, I anticipate that the Dow Jones will continue to lead the market over the NASDAQ 100. This shift is due to a rotation out of tech and into value stocks. The topping of semiconductors and potential expansion in market breadth suggest moving funds from large-cap tech into other market sectors.
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