{"id":6833,"date":"2024-07-27T12:03:32","date_gmt":"2024-07-27T12:03:32","guid":{"rendered":"https:\/\/businesstriumphs.com\/index.php\/2024\/07\/27\/will-the-sp-500-break-5000-by-september\/"},"modified":"2024-07-27T12:03:32","modified_gmt":"2024-07-27T12:03:32","slug":"will-the-sp-500-break-5000-by-september","status":"publish","type":"post","link":"https:\/\/businesstriumphs.com\/index.php\/2024\/07\/27\/will-the-sp-500-break-5000-by-september\/","title":{"rendered":"Will the S&P 500 Break 5000 by September?"},"content":{"rendered":"
\n

This week saw the major equity averages continue a confirmed pullback phase, with some of the biggest gainers in the first half of 2024 logging some major losses. Is this one of the most buyable dips of the year? Or is this just the beginning of a protracted decline with much more pain to come for investors?<\/p>\n

Today, we\u2019ll walk through four potential outcomes for the S&P 500 index over the next six to eight weeks. As I share each of these four future paths, I\u2019ll describe the market conditions that would likely be involved, and I\u2019ll also share my estimated probability for each scenario.<\/p>\n

By the way, we conducted a similar exercise for the S&P 500 back in April, and you may be surprised to see <\/em>which scenario actually played out<\/em><\/a>!<\/em><\/p>\n

And remember, the point of this exercise is threefold:<\/p>\n

Consider all four potential future paths for the index, think about what would cause each scenario to unfold in terms of the macro drivers, and review what signals\/patterns\/indicators would confirm the scenario.
\nDecide which scenario you feel is most likely, and why you think that\u2019s the case. Don\u2019t forget to drop me a comment and let me know your vote!
\nThink about how each of the four scenarios would impact your current portfolio. How would you manage risk in each case? How and when would you take action to adapt to this new reality?<\/p>\n

Let\u2019s start with the most optimistic scenario, involving the S&P 500 making yet another new all-time high as the bullish trend resumes.<\/p>\n

Option 1: The Super Bullish Scenario<\/h2>\n

Our first scenario would mean that the brief pullback phase is now over, and the S&P 500 and Nasdaq would power to new all-time highs in August. By early September, we\u2019d be talking about the resurgence of the Magnificent 7 names, reflecting on how the markets in 2024 have diverged so much from the traditional seasonal patterns, and discussing the likelihood of the S&P finishing 2024 above the 6000 level.<\/p>\n

Dave\u2019s Vote: 5%<\/em><\/p>\n

Option 2: The Mildly Bullish Scenario<\/h2>\n

What if the Magnificent 7 stocks take a backseat to other sectors, such as financials and industrials?\u00a0If the value trade continues to work, as we\u2019ve observed in the last couple weeks, we could see a scenario where lots of stocks are working well but it\u2019s not enough to propel the equity benchmarks much higher. The S&P 500 wouldn\u2019t see much downside in this scenario and would spend the next six to eight weeks between 5400 and 5650.<\/p>\n

Dave\u2019s vote: 15%<\/em><\/p>\n

Option 3: The Mildly Bearish Scenario<\/h2>\n

How about a scenario where this pullback continues to plague the equity markets, but the pace of the decline lightens up a bit? The mega-cap growth stocks continue to struggle, but we don\u2019t see those full risk-off signals and the VIX remains below 20. By early September, we\u2019re down about 10% overall off the July high, but investors are licking their lips about a potential Q4 rally into year-end 2024.<\/p>\n

Dave\u2019s vote: 60%<\/em><\/p>\n

Option 4: The Super Bearish Scenario<\/h2>\n

You always need to consider an incredibly bearish scenario, if only to remind yourself that it\u2019s a possibility, even a very unlikely one! What if this pullback is just getting started, the S&P 500 fails to hold the 5000 level, and we see a break below the 200-day moving average? That would mean a similar pullback to what we experienced in August and September 2023, and while we\u2019re talking about the potential for a Q4 rally, we\u2019re all way more concerned that there\u2019s even more downside to be had before it\u2019s all said and done.<\/p>\n

Dave\u2019s vote: 20%<\/em><\/p>\n

What probabilities would you assign to each of these four scenarios? Check out the video below, and then drop a comment with which scenario you select and why!<\/p>\n

<\/div>\n<\/p>\n

RR#6,<\/p>\n

Dave<\/p>\n

PS- Ready to upgrade your investment process?\u00a0Check out my free behavioral investing course<\/a>!<\/span><\/p>\n

David Keller, CMT<\/p>\n

Chief Market Strategist<\/p>\n

StockCharts.com<\/p>\n

Disclaimer: 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.\u00a0<\/em><\/p>\n

The author does not have a position in mentioned securities at the time of publication.\u00a0\u00a0\u00a0Any 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":"

This week saw the major equity averages continue a confirmed pullback phase, with some of the biggest gainers in the first half of 2024 logging some major losses. Is this one of the most buyable dips of the year? Or is this just the beginning of a protracted decline with much more pain to come […]<\/p>\n","protected":false},"author":0,"featured_media":6834,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":["post-6833","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-stock"],"_links":{"self":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/6833","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/comments?post=6833"}],"version-history":[{"count":0,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/6833\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media\/6834"}],"wp:attachment":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media?parent=6833"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/categories?post=6833"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/tags?post=6833"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}