Chart of the Day - Thursday, January 18, 2024

🏆 Today’s Chart of the Day was shared by Katie Stockton (@StocktonKatie).

• The S&P 500 is trolling the bulls at this point. It’s been within 3% of a record high for over a month but refuses to make it official.

• Katie reminds us that the S&P 500 and its largest component ($MSFT) have formed multi-year Cup and Handle patterns despite the short-term pause. These long-term accumulation patterns only appear once or twice a decade in a major index like the S&P 500.

• Microsoft ($MSFT) recently surpassed Apple ($AAPL) as the largest stock in the S&P 500. It represents 7.27% of the index, more than the bottom three sectors combined (Utilities + Real Estate + Materials).

The takeaway: The most important index ($SPX) and the most important stock ($MSFT) have formed multi-year accumulation patterns. $MSFT gives us a potential roadmap for the S&P 500 in the coming weeks.