Mid-Week Market Outlook: Where Do Stocks Go From Here?

Brandon Van Zee

The SPDR S&P 500 ETF NYSEARCA: SPY vaulted higher by 1.50% after market participants learned that anticipated trade tariff hikes on some key Chinese imports would be delayed until December.

All four major U.S. stock market indices continue to have a weakly bullish intermediate posture according to the Market Forecast technical indicator.

While the postures are currently firm, the 30 day moving averages continue to drift lower and might act as resistance areas in the weeks to come.

All four charts look similar on a “3 Green Arrows” basis with green arrows on the Stochastics and red arrows on the 30 Day Moving Averages and MACD Histograms.

The Russell 2000 ETF NYSEARCA: IWM is the only major U.S. stock index with a 10-40 weekly “death cross”, which is valid as of Friday’s close.

The VIX Volatility Index INDEXCBOE: VIX sold off by nearly 17% today and engulfed the prior day’s candle.

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Stock Market Video – August 14, 2019

10 Year Treasury yields bounced a bit today, but still have a very low reading of 1.63%; the key 2 yr/10 yr yield spread is nearing inversion.

The U.S. Dollar had a strong bounce off its rising 30 day moving average area; most commodities were down slightly.

Foreign markets remain more of a mixed bag compared to the United States; Russia, India, China, Germany, United Kingdom, and South Africa continue to have bearish postures.

All 11 S&P stock market sectors in the U.S. have bullish intermediate postures; Real Estate and Utilities ranked #1 and #2 on the Sector Selector tool due to their interest rate sensitivity.

Our trade application example featured entering a swing trade in Sleep Number (SNBR) after it bounced nicely off of its rising 30 day moving average today.

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