Stock Market Indicators Forecasting Near-Term Pullback

Brandon Van Zee

The S&P 500 Index INDEXSP: .INX hit another all-time intraday high and closed higher by 0.16% today; the NASDAQ Composite also hit all-time highs.

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

They are also trading above the rising 30 day moving average.

This current bullish near-term run has gone on longer than typical ones so a short-term pullback could be considered healthy; the S&P 500 is forming a bearish Near-Term divergence so that could become a distinct possibility.

The Russell 2000 Index INDEXRUSSELL: RUT no longer has a “3 Green Arrows” signal due to a loss of positive momentum over the past week.

All four major U.S. stock market indices have bullish 10-40 weekly moving average crossover signals.

After a solid surge in the last couple weeks, U.S. Treasury yields fell back down to 1.90% today.

Many of the risk-off asset classes have experienced oversold cluster signals in recent sessions including: preferred stocks, long-term government bonds, foreign bonds, REITs, and gold.

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Stock Market Video – November 12, 2019

On a market-cap weighted basis, Consumer Discretionary has a bearish intermediate posture (due to the 33% weighting of AMZN, which has been underperforming), but on an equal-weighted basis, Consumer Discretionary stocks actually have a bullish intermediate posture.

The Sector Selector shows Industrials, Financials, and Materials as the highest ranked sectors.

Major emerging markets like China and Brazil have pulled back to interesting support levels in the past week; Japan keeps marching higher.

Saudi Arabia is starting to develop an inverted head-and-shoulders reversal pattern just in time for its biggest IPO launch in history (Saudi Aramco).

Our trade application example featured purchasing shares of Allstate (ALL) for a swing trade now that it has broken out of its sideways channel and is hitting all-time highs.

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