Stock Market Outlook Brightens As Indices Try To Reverse Higher

The S&P 500 Index rallied strongly and finished higher by 2.14% on Tuesday. 88 percent of its components finished higher with only Energy stocks consistently lower.

After the impressive bounce, the S&P 500, Dow Jones Industrial Average, and Russell 2000 now have weakly bullish intermediate postures.

Despite the strongest bounce Tuesday (+2.92%), the NASDAQ Composite is the only major index that continues to have a strongly bearish posture.

All four major stock market indices continue to trade below their falling 30 day moving averages.

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The Russell 2000 was up 1.4% today and has been more resilient than other indices recently; it has a bullish Near-Term divergence signal.

The Dow Jones Industrial Average bounced 1.82% Tuesday and is now at its highest closing price since March 4th.

The VIX closed below 30 for the first time since February 25th.

The Momentum factor remains last on the Factor Selector; Dividend Yield remains at the top (Low Volatility is showing strength in the past month).

Oil crashed 6% and is back below $100/barrel; it now sits directly atop its rising 30 day moving average after a big pullback in the last week.

Gold fell 1.87%; similar to oil, it’s sitting right on top of its rising 30 day moving average (which could give traders a reason to buy it for a bounce).

The 10 Year U.S. Treasury Yield had another big rally and ended at 2.16%, its highest level since May 2019.

Bonds of nearly all varieties fell Tuesday; they have strongly bearish intermediate postures and several have oversold clusters.

With oil prices falling sharply, it wasn’t a surprise to see Energy as the day’s biggest sector loser: -3.66% (its posture is now weakly bearish).

Technology and Discretionary both rallied by 3.3% but remain in downtrends.

The “Top 4” on this week’s Sector Selector were: Energy, Utilities, Materials, and Real Estate.

Our trade application example featured selling a put on Phillips 66 (PSX) due to a surprising oversold cluster signal on the daily candle chart and a reasonably attractive dividend yield according to our newly revamped Dividend Stairstep chart.

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

Stock Market Outlook Video (for March 16) – 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.