Stock Market Bears Take Control, But For How Long?

After an onslaught of recent selling, the stock market bounced back today, with the S&P 500 Index INDEXSP: .INX popping higher by 1.30%.

Despite the sizable rally, all four major stock market indices continue to have strongly bearish intermediate postures according to the Market Forecast technical indicator.

All four major stock market indices also have “3 Red Arrows” signals and the Russell 2000 INDEXRUSSELL: RUT currently has a “death cross” on the 10-40 weekly crossover system.

After an aggressive move higher over the preceding 2 weeks, the VIX sold off by 18% today but remains at a relatively-elevated reading above 20.

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10 Year Treasury yields stabilized today, but their recent reading of 1.73% remains their lowest level in nearly 3 years.

Bonds in the United States and abroad continue to rise as investors seek safety from the turbulent stock market; gold is also benefiting from that safe haven sentiment.

Crude oil prices fell again, which continued the theme of Energy stocks being incredibly weak with many key names hitting 52-week lows today.

Get market insights, stock trading ideas, and educational instruction over at the Market Scholars website.

Stock Market Video – August 7, 2019

Investor sentiment is bearish across the globe in both developed and developing countries. The stock market in Israel is the rare case where its price is still above its rising 30 day moving average.

Only the Utilities and Real Estate sectors in the United States have a bullish intermediate posture; they’ve been able to weather the storm better than other sectors due to their interest rate sensitivity.

The Sector Selector showed a decidedly defensive tilt towards the sector rotation changes on a week-over-week basis.

Our trade application example featured selling a bear call spread on Nike (NKE) now that it broke key support levels and has a strongly bearish intermediate posture.

Twitter:  @BrandonVanZee and @Market_Scholars 

Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.