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The S&P 500 moved close to its all-time high again - will the rally continue?

On Tuesday, the S&P 500 index closed 0.41% higher, retracing Monday’s short-term pullback. Investors are awaiting Nvidia’s (NVDA) key quarterly earnings, scheduled for release after the market close. The S&P 500 is expected to open 0.1% higher.

Investor sentiment remains relatively weak, as reflected in last Wednesday’s AAII Investor Sentiment Survey, which reported that 30.8% of individual investors are bullish, while 44.8% are bearish.

The S&P 500 continues to consolidate near its August 15 all-time high of 6,481.34, as shown on the daily chart.

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Nasdaq 100 Fluctuates Around 23,500

The Nasdaq 100 gained 0.43% on Tuesday, extending its sideways movement following last Friday’s rebound. Support is around 23,350, while resistance is between 23,700 and 23,800.

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VIX Remains Relatively Low

On Tuesday, the VIX (Volatility Index) closed below 15, confirming continued complacency in the market.

Recently, the decline in VIX reflected declining investor fear (declining gold prices indicate the same thing).

Historically, a dropping VIX indicates less fear in the market, and rising VIX accompanies stock market downturns. However, the lower the VIX, the higher the probability of the market’s downward reversal. Conversely, the higher the VIX, the higher the probability of the market’s upward reversal.

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S&P 500 Futures Contract Moves Closer to 6,500 Again

This morning, the S&P 500 futures contract is trading sideways following Tuesday’s intraday advance. The market retraced Monday’s pullback and is now trading below the resistance of 6,500, with support around 6,450.

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Market Outlook: Sentiment Improves, but All Eyes Are on Nvidia

Today, the S&P 500 is set to open slightly higher as investors await Nvidia’s earnings release. Given that Nvidia makes up about 7.7% of the index, the results could significantly impact the broader market after the close. While no confirmed negative signals are evident, a “sell-the-news” reaction remains possible tomorrow.

Here's what I think is most likely:

• The S&P 500 will likely fluctuate ahead of the Nvidia’s earnings release today.
• My Volatility Breakout System is currently short in the market.
• The long position in TSLA from mid-July continues to show gains.

What This Means for Your Portfolio

For individual investors, this environment calls for careful position management. While the market continues to advance, the combination of low volatility, seasonal weakness signals, and stretched valuations suggests that defensive positioning may become increasingly important in the weeks ahead.

The current market conditions highlight the value of having a systematic approach to investing rather than trying to time every market move. Whether you're using technical systems like the Volatility Breakout System or following seasonal patterns, having a disciplined framework becomes crucial during uncertain times.

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