There isn’t any denying the power of the bullish major development for shares off the April low. The Nasdaq 100 index continues to make new all-time highs, closing slightly below $480 on Friday after gaining about 3.5% during the last week. However will this unbelievable uptrend proceed into July and August?
We have been monitoring loads of warning indicators, from the dramatic enhance in bearish momentum indicators to an preliminary sign from the Hindenburg Omen in late Might. However, regardless of these bearish implications, the power of mega-cap progress shares, like Nvidia (NVDA) and Apple (AAPL), has been sufficient to drive the most important fairness benchmarks larger. The query for buyers is whether or not the power in these main progress shares can be sufficient to maintain this bullish market development in place!
As we speak, we’ll lay out 4 potential outcomes for the Nasdaq 100. As I share every of those 4 future paths, I will describe the market circumstances that might doubtless be concerned, and I will additionally share my estimated chance for every state of affairs.
By the best way, we performed the same train for the Nasdaq 100 again in February, and you will not consider which state of affairs truly performed out!
And bear in mind, the purpose of this train is threefold:
- Contemplate all 4 potential future paths for the index, take into consideration what would trigger every state of affairs to unfold when it comes to the macro drivers, and evaluate what indicators/patterns/indicators would verify the state of affairs.
- Resolve which state of affairs you’re feeling is more than likely, and why you suppose that is the case. Do not forget to drop me a remark and let me know your vote!
- Take into consideration how every of the 4 situations would influence your present portfolio. How would you handle danger in every case? How and when would you’re taking motion to adapt to this new actuality?
Let’s begin with essentially the most optimistic state of affairs, involving the QQQ pushing above $500 over the following six-to-eight weeks.
Choice 1: The Very Bullish Situation
Essentially the most optimistic state of affairs would imply the Nasdaq 100 continues its unbelievable tempo, pushing properly above the $500 stage by the tip of July. Not solely would main progress names proceed to thrive on this setting, however different shares that haven’t been collaborating – comparable to Vitality and Industrials – would doubtless rotate larger as a broader advance propels the QQQ to additional new all-time highs.
Dave’s Vote: 10%
Choice 2: The Mildly Bullish Situation
What if the market stays elevated, however the tempo slows method down? This second state of affairs would imply that the Magnificent 7 shares would stall a bit, and maybe different shares would rotate larger. The foremost benchmarks would stay in a major uptrend, however we might be speaking about management rotation because the market stays in a «wait and see» mode about potential Fed price cuts later in 2024.
Dave’s vote: 25%
Choice 3: The Mildly Bearish Situation
Each of the bearish situations would contain a pullback in main progress names, and if main names like NVDA start to retrace their features from early 2024, we might face a mildly bearish state of affairs. Breadth circumstances stay weak and, after the leaders begin to fail, there’s nowhere to go however decrease. In state of affairs #3, I might count on the Might low round $443 to carry for the QQQ, and this begins to really feel like a well-deserved pullback whereas the first uptrend nonetheless stays in place.
Dave’s vote: 60%
Choice 4: The Tremendous Bearish Situation
You at all times must have an excellent bearish final result, which helps to place the opposite three into correct perspective. In state of affairs 4, the management shares give again their current features, and maybe some robust financial knowledge brings the entire «Fed Goldilocks state of affairs» into query. The QQQ drops beneath its Might low, and by late July we’re debating whether or not the April low will maintain. Whereas the most important fairness benchmarks nonetheless have optimistic returns in 2024, this corrective transfer forces even essentially the most optimistic of bulls to rethink their thesis.
Dave’s vote: 5%
What chances would you assign to every of those 4 situations? Try the video beneath, after which drop a remark with which state of affairs you choose and why!
RR#6,
Dave
P.S. Able to improve your funding course of? Try my free behavioral investing course!
David Keller, CMT
Chief Market Strategist
StockCharts.com
Disclaimer: This weblog is for instructional functions solely and shouldn’t be construed as monetary recommendation. The concepts and techniques ought to by no means be used with out first assessing your individual private and monetary scenario, or with out consulting a monetary skilled.
The creator doesn’t have a place in talked about securities on the time of publication. Any opinions expressed herein are solely these of the creator and don’t in any method symbolize the views or opinions of every other particular person or entity.

David Keller, CMT is Chief Market Strategist at StockCharts.com, the place he helps buyers decrease behavioral biases by means of technical evaluation. He’s a frequent host on StockCharts TV, and he relates mindfulness methods to investor resolution making in his weblog, The Conscious Investor.
David can also be President and Chief Strategist at Sierra Alpha Analysis LLC, a boutique funding analysis agency targeted on managing danger by means of market consciousness. He combines the strengths of technical evaluation, behavioral finance, and knowledge visualization to determine funding alternatives and enrich relationships between advisors and purchasers.
Study Extra