Monthly Forecast : #NASDAQ100 & #SP500 (April 2024)

NASDAQ 100 Monthly Forecast: April 2024

Post-choppy March, watch 17,775 support for direction. Potential grind higher amid summer quiet. Key strategy: buy dips, avoid shorting.

• The NASDAQ 100 has seen a very choppy month of March, but quite frankly we have shot straight up in the air so little bit of consolidation was exactly what the market needed.
• Whether or not that holds for the longer-term remains to be seen but I am watching the support level from the month, the 17,775 level, for signs of where we go next.
• As long as we can stay above that area, then I don’t think much has changed and quite frankly we may be looking at a market that is just trying to sort out where it goes next.

Ultimately, I do think that this market will go higher but we may need a little bit of a reset. That reset could take the form of a month or two of grinding, as we work off some of the excess froth. Furthermore, we are starting to get a little closer to the summer season, which typically is a bit quiet. Nonetheless, I still think that the market is very much the same market that we have been in for a while, meaning that you can either be on the sidelines and simply out of the market, or you are looking to buy dips. Shorting the NASDAQ 100 has been tantamount to blowing up your account on purpose every time you do it.

Look for Value

I think the only thing you can do on this index is to simply look for value as it occurs. Short-term pullbacks will come from time to time, and as long as you are not betting the entire account that you have on that pullback, you should be fine. There’s nothing wrong with building up a position over time, but quite frankly I think this is a market that has gotten so far ahead of itself that we could see a 10% correction. Dad 10% correction would be an excellent buying opportunity but I just don’t see anything on the chart right now that suggests we are about to have it. When I say that there could be a 10% correction, is just a simple statement that we had shot straight up in the air so rapidly.

SP 500 Monthly Forecast: April 2024

Bullish trend persists in well-defined channel. Potential for short-term pullbacks, but overall market likely to rise with rate cut expectations.

• Stock markets are essentially stuck in a feedback loop around the world, and the S&P 500 of course will be no different.
• The S&P 500 is the largest stock index in the world, and therefore it is worth paying close attention to what it’s doing.
• I do believe that we continue to see bullish behavior due to the fact that traders simply feed on momentum more than anything else.
• During the course of March, we have most certainly seen quite a bit of buying again, but it’s probably worth noting that we are just simply going up in a very rigidly defined channel.

At this point in time, I do think that the market could probably use a little bit of a pullback, and for what it is where we have recently seen a lot of noisy choppy volatility. This does suggest that perhaps we might get a short-term pullback, but I think at this point in time it’s obvious that the short-term pullbacks continue to get bought into. After all, the S&P 500 is not an equal weighted index, and of course the traders on Wall Street are all gung ho for the idea that the Federal Reserve is going to cut rates this year. If they do, that obviously could help stock markets in general, so I think this is about a self-fulfilling prophecy.

Keep It Simple

There’s no reason to overthink the entirety of the market right now. The S&P 500 is not equal weighted, so as long as the handful of stocks that everybody loves continues to attract inflows from retirement funds, pension funds, investment banks, etc., then it makes quite a bit of sense that the S&P 500 will be forced to go higher. Yes, the move was absolutely ridiculous, and I do think that a pullback is desperately needed. However, it does not matter what I think, what matters is what will happen.

At this point in time, I think it’s simply a matter of buying into the S&P 500 every time it pulls back significantly, because it does give you an opportunity to pick up a little bit of value. I see the 5100 level as a value level that I’d be very interested in, and of course I would be even more interested in the 5000 level. I have no interest in shorting this market and look at any significant selloff as a buying opportunity for longer-term investors.

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