Stock Market Indicators Flash Risk-On As New Records Set

A strong push higher by Chinese stocks helped propel select U.S. stock market indexes into record-breaking territory on Tuesday. And the futures markets are pointing higher again into Wednesday.

The S&P 500 Index finished higher by 0.15% on Tuesday, achieving an all-time high for the 50th time this year. The Index continues to have a strongly bullish posture.

The Dow Jones Industrial Average finished slightly higher and is back to a strongly bullish intermediate posture according to the Market Forecast indicator.

The NASDAQ Composite had a big day. The strongly bullish index rose 0.52% and closed above 15,000 for the first time in its history

The Russell 2000 rose the most (+1.02%), but unlike the other stock indices, its posture is only weakly bullish (it has a declining 30 day moving average).

This was a “risk-on” day where the cyclicals easily outpaced the non-cyclicals, which was a change from last week’s tone.

Government bonds (-0.78%) followed defensive sectors lower; high-yield bonds (+0.14%) followed oil prices higher. Emerging market stocks (+2.27%) were led higher by Chinese internet names, but that wasn’t enough to resolve the strongly bearish posture quite yet. Crude Oil (+3.32%) and gold (-0.05%) both now have bullish intermediate postures, but neither of their trends look particularly appetizing yet.

Bitcoin sold off just over 1% today, but after a furious rally in recent weeks, it might be just digesting gains and continues to be strongly bullish

Following oil prices, Energy was the biggest sector advancer today with a move of 1.66%; however, it still has a strongly bearish intermediate posture

Our trade application example featured buying a bull call spread on DraftKings Inc (DKNG) due to its bullish breakout from a multi-month reversal pattern, in addition to achieving a “5 Green Arrows” signal after today’s bounce higher

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

Stock Market Outlook Video (for August 25) – News and Analysis

Twitter:  @BrandonVanZee and @MarketScholars

The author may have a position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author and do not represent the views or opinions of any other person or entity.

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