Charting the S&P 500: Large-Caps Were the Story in the First Half of 2024
Add to that, the thunder of technology stocks and it was certainly one-sided.
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There is no question where the power was in the first half of 2024. If you had to say one name responsible for the action of the indexes or a collection of names, it would be TheStreet Pro Portfolio position Nvidia NVDA. Nvidia is like an octopus with long tentacles, it touches just about every name related to generative artificial intelligence (AI) and has had incredible influence across the large-cap landscape.
But we have to ask if it can continue, and the answer, of course, is "it depends." So much uncertainty is out there for the remainder of 2024, including a possible shift in Fed policy, a presidential election, along with battles/wars overseas that do not seem to have an end in sight.
All of these uncertainties were out there at the start of the year, but as the calendar pushes ahead they become ever closer to certainty. Markets appreciate certainty but actually thrive on uncertainty, because that creates volatility.
That said, the S&P 500 had a strong first half of the year, rising 14.7%. That would be a great FULL year return. If we annualized that return, we would be looking at perhaps a 29.4% gain on the year, following up a very strong 24% in 2023. That would be an amazing accomplishment, but several things need to fall in place for it to happen.
The technicals on the weekly chart remain strong. Notice the entire year the S&P chart (candles) have been blue (save for about four weeks). That is an impressive run and extends back to November 2023.
MACD (moving average convergence/divergence) remains on a buy signal, stochastics are strong and the channel in the top pane has a higher objective (roughly 5800 to the top of the channel).
It might be challenging to get there when we see the VIX at 12% versus a higher level. This simply means the market is complacent and does not believe a big drop is coming in the next 30 days or so.
If the chart and indicators tell us to remain bullish, we will continue to do so.
