4 Major U.S. Stock Market Indices Have Bearish Intermediate Postures

Brandon Van Zee

The S&P 500 (NYSEARCA: SPY) finished the week on a sour note closing Friday down 0.58%, which was near the lows of the session.

The highest Consumer Sentiment numbers in 15 years along with positive trade talks between North American countries couldn’t offset the bearishness that entered into all major equity indices; the small cap Russell 2000 (NYSEARCA: IWM) suffered the worst and was down 1.38%.

All four major U.S. stock market indices have strongly bearish intermediate postures according to the Market Forecast technical indicator.

All four major indices also have “3 Red Arrows” signals.

All four major U.S. stock market indices managed to see their 10 week moving averages stay above their 40 week moving averages, but a “death cross” on the Russell 2000 could become a reality within the next month.

The U.S. Dollar continues to be one of the strongest trends from a macro-perspective; it finished today’s session at 3 month highs.

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Weekend Stock Market Video – May 18, 2019

  • U.S. government long bonds and foreign bonds also have reasonably strong trends
  • The VIX Volatility Index closed a touch higher today but did finish near the lows of the week; gold also struggled
  • Stocks in Russia and Canada managed to eek out bullish intermediate postures, but things looked ugly across the rest of the world with China, Brazil, and South Africa all seeing losses of over 1.5% and retaining their bearish postures
  • According to the Strategy Lab tool, the Dividend Yield and Low Volatility factors saw the most relative strength over the past week as investors attempted to preserve capital in more mundane areas of the market
  • From a sector perspective, the only ones in the U.S. with bullish intermediate postures are those aligned with defensiveness: Staples, Utilities, & Real Estate
  • Our trade application example featured buying a put spread on Chevron (CVX) to try and take advantage of its various bearish indications from a Market Forecast perspective and also general weakness within the Energy sector

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