Can Stock Market Bulls Safely Navigate Interest Rate-Sensitive Period?

Brandon Van Zee

The S&P 500 Index finished lower by 0.84% on a day that saw trading activity turn negative after impeachment rumors started swirling around President Trump.

After today’s sell-off, the NASDAQ Composite and the Russell 2000 now have weakly bearish intermediate postures according to the Market Forecast technical indicator.

The Dow Jones Industrial Average and S&P 500 both have bullish intermediate confirmation signals.

The Russell 2000 suffered its 6th straight down day and is the only major index with its 10 week moving average residing below its 40 week moving average.

The NASDAQ Composite now has a “3 Red Arrows” signal; it is the only major U.S. equity index with its price below the 30 day moving average.

Interest rates fell today, allowing REITs, Preferred Stocks, and Bonds to outperform

In today’s risk-off session, gold prices flourished while oil prices struggled.

From a Market Forecast intermediate posture perspective, the only sectors with bullish postures are Utilities and Financials.

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Stock Market Video – September 24, 2019

Technology stocks struggled today as many of this summer’s former leadership software stocks experienced extreme underperformance.

The Sector Selector rankings show a decidedly interest rate-sensitive tilt with Utilities and Real Estate controlling the top two slots.

From a factor perspective, we are starting to see separation between the Momentum factor and the Low Volatility factor, which is not something that had occurred earlier in the year.

Our trade application example featured selling a bull put spread on the gold ETF (GLD) now that it has popped back up above its rising 30 day moving average.

Twitter:  @BrandonVanZee and @Market_Scholars 

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