Yahoo Finance

S&P 500 notches a five-day win streak. As Wall Street shakes off trade war worries and here with the trading day takeaways, we've got Yahoo Finance's Jared Blickre. Jared.

Thank you, Josh. To the moon, right? Five days. And the stat I love is that the Nasdaq composite and the 100 have been up three of the last six weeks more than 6%, and the question is for investors, has it gone too far, too fast? I tried to answer that, and I I drew up a number of stats. So look for the complete it on the Yahoo Finance website, but this is kind of the summary. So I have three bars here, and they're representing three different strategies. In green, which is these first bars in each of these sets, if you buy at any random day, basically since 1985, and you held for one day, well, you'd make virtually nothing. One week, a little bit more. And I'm looking at the green here. One month, you start to see some decent returns. And then two, one quarter, two quarters, all the way up to one year, and then you're approaching 20%. So that's what you would normally buy just by throwing I don't know, something at a dart and saying let's buy today. Now, what happens when the Nasdaq 100 becomes overbought? And I use relative strength indicator. Gone through this several times here before, but basically, has it gone too far, too fast? Well, when that happens in white here, we see returns are a little bit less sometimes than the green line. So less than average and some, but a little bit more in some of these others, especially long term, one year a little bit less than the average. So that's not the greatest strategy, but it's certainly not telling you to sell. Now, what what we have here is not only the Nasdaq 100 itself overbought, but the internals, the components of it, something north of 57% are of the 100 components are north of their 200-day moving average. That is coming from an 11%. So from 11 to 57, that indicator itself has become overbought. So when we have both of these conditions, guess what? You see supersized performance going out one year in the near term, like one month, two weeks, one day, things can struggle a little bit. So we might be a little bit due for a tiny bit of a pullback, but in the long term, it does not pay to sell right now.

Now, viewers who are watching this, Jared, before they begin to, okay, before they slam the buy button, what are some of the risks they need to think about?

Well, here's what I'm looking at. Here's another thing. The 30-year yield has been touching 5%, and that is the danger zone. It has not gotten above materially, and it did a little bit ago. And I'll show you a chart right here. Here's 2023, and we can see in late 2023, it poked above 5%, but then it came straight back down. Didn't quite reach it in 2024, but now it is punched it several times. Let me show you a two-year chart with candlesticks, and you can see this has been like an electric fence. Touched it precisely here at the beginning of the year, then just a few weeks ago, and then yesterday, but it is backed off. The thing that troubles me a little bit is that the pullbacks here, what we're seeing these downdrafts after the reactions, have gotten smaller and smaller. So what happens if the if the 30-year goes north of 5%? And that is what happens. So, uh, if it's based on inflation worries, then we get an inflation pop. And then commodities should be leading while stocks kind of chop around. That's this and that's this scenario here. If it goes over 5% because real rates are rising, well, that's kind of shows you that the Fed might need to stand in. That's when you have PEs compressing. That's when tech lags. And then if we stay under 5%, that is the soft glide scenario. And this is how we see the broad rally kind of sailing on. So we want to see the 30 years stay under 5%, but if it doesn't, we could see some trouble ahead and exactly how it plays out. Well, we'll have to see.

Before we go, let's get your take on gold, the yellow metal. Is this still a safety trade?

Yeah, uh, gold is putting in an M top. That's kind of a technical thing, and I'm going to show that real quickly here. Um, I like gold. It's up about 20, 22% year to date, and let's check in on it right now. Still up 20%, but look at that. That is an M top right there. And so technically, it could sell off from here. If it pops back above, well, probably going to test those highs and go beyond. But in the meantime, Bitcoin has just been racing higher. It stopped a little bit, but the trend is nice, and we'll see if I can find it here. If not, you're just going to have to take my word for it. 105,000, 107,000 is a record. We'll have to see if it breaks it soon.