Stock Market Outlook: Bearish 3 ‘Red Arrow’ Signals Persist

Brandon Van Zee

The S&P 500 Index surged 6% Tuesday, which was its biggest up day in percentage terms since 2009.

With Tuesday’s move again exceeding 4%, a new record has been established: this is the first time in history the S&P 500 has moved either up or down 4% for seven consecutive trading sessions.

Now we turn to Wednesday, which is pointing lower already. And despite the massive rally, it only puts markets back to where they were trading the day before and all four major U.S. stock market indices continue to have strongly bearish postures.

The NASDAQ Composite was the day’s leader(+6.23%) as Technology stocks have exhibited surprising relative strength during the market meltdown.

All stock indices continue to have “3 Red Arrows” signals and accomplishing back-to-back winning sessions has been difficult to do in the past month.

The VIX Volatility Index closed at 75 after briefly touching 84, which hadn’t happened since the 2008 financial crisis.

Stock Market Video – March 17

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

The U.S. Dollar has surged in the last week, which partially explains gold’s lackluster performance despite traditionally holding up better during chaotic markets.

U.S. Treasury yields surged today with the 10-year yield ending back at 1%.

The Utilities sector erupted higher today(+12.8%); meanwhile, the Financials once again underperformed(+5.4%).

Consumer Staples, Technology, and Health Care seem to be holding up the best in this environment according to the Sector Selector.

International stock markets are also getting rocked, with Brazil, Russia, Germany, and others down more than the United States.

Our trade application example featured short selling Check Point Software (CHKP) after a furious 3 day rally pushed it back to its 50% Fibonacci retracement level where resistance may once again take hold for this down-trending stock.

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.