SPX: overbought momentum - again
Nvidia has again impacted the course of the S&P index, but this time to the opposite side. The index pulled back on Friday, after the market reassessed the stock's all time high. The stock notably declined on Friday closing down by more than 3%. This drop contributed to a broader sell-off in tech stocks. The decline was partially attributed to profit-taking after a strong rally during the year of around 155% year-to-date, and concerns about the sustainability of its high valuation amidst the ongoing AI boom. The S&P 500 still managed to reach a new record in value during the previous week and surged around 0.6%. The new ATH for the index is 5.503, reached on Thursday. Still, Friday`s decline brought the index to end the week at the level of 5.471.
At the same time analysts from Deutsche Bank are noting a high possibility of the S&P 500 pullback in the coming period. They are specifically referring to three factors which might indicate that the short reversal is coming, including: increase in equity positioning of discretionary funds, nine consecutive weeks of inflows into equity funds and approaching buyback blackout period before the release of Q2 results. These factors might bring a short pause to the continuing uptrend of the index, as per DB analysts.
At the same time analysts from Deutsche Bank are noting a high possibility of the S&P 500 pullback in the coming period. They are specifically referring to three factors which might indicate that the short reversal is coming, including: increase in equity positioning of discretionary funds, nine consecutive weeks of inflows into equity funds and approaching buyback blackout period before the release of Q2 results. These factors might bring a short pause to the continuing uptrend of the index, as per DB analysts.
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