Stock Market Indicators Bullish As Investors Prepare for Federal Reserve

Brandon Van Zee

The S&P 500 (SPY) finished higher by 0.26% on Tuesday, as investors keep a bid under stocks. That said, the daily trading range is tightening while the stock market waits for the Federal Reserve interest rate decision Wednesday.

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

Last week’s market rotation unwound a bit today; the Russell 2000 (IWM) finished lower by 0.40% while the NASDAQ (QQQ) finished higher by 0.40%.

All four major U.S. stock market indices are trading above their 30 day moving averages and have “3 Green Arrows” signals.

The Russell 2000 is the only major index to currently have a bearish 10-40 weekly moving average crossover, but a bullish crossover could occur within a week or two.

The Momentum and Low Volatility factors had a nice snap-back rally today, while the Value Factor has been slightly lower the past two sessions.

The latest rankings from the Sector Selector tool showed some significant changes with the Industrials and Discretionary sectors improving substantially.

Stock Market Video – September 17, 2019

Consumer Staples is the only sector with a bearish intermediate posture currently.

Most major foreign stock markets have bullish intermediate postures; Japan and Taiwan are showing good strength while Saudi Arabia and Argentina have been struggling.

The 10-year U.S. Treasury yield fell to 1.81% and REITs benefited by closing higher by 1%.

Oil was the big story of the day; after surging yesterday on the Saudi Arabia refinery drone strike, oil fell substantially after the market learned that production/supply would be back to normal levels within a few weeks.

Our trade application example featured selling a bear call spread on the Energy sector ETF (XLE) due to a bearish Near-Term divergence after the volatility of recent sessions.

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.