Stock Market Outlook Clouded By Interest Rates, Russia/Ukraine

The S&P 500 Index rallied strongly on Tuesday as the market breathed a collect sigh of relief on the Russia/Ukraine situation; 80% of its components finished higher.

Despite the big move on Tuesday, the S&P 500 Index heads into Wednesday’s trading session with a strongly bearish intermediate posture and is below its falling 30-day moving average.

The Russell 2000 produced the strongest move on Tuesday (+2.75%); it also has a weakly bullish posture and is trading just a hair above its falling 30-day moving average.

The NASDAQ Composite also performed admirably Tuesday (+2.53%), but still has a strongly bearish posture and is trading below its falling 30-day moving average.

The Dow Jones Industrial Average was the day’s relative laggard; it has a weakly bearish posture and is trading below its falling 30-day moving average.

The Dow has a “3 Red Arrows” signal, the Russell 2000 has a “3 Green Arrows” signal, and the other indices have a mix of green and red arrows.

The 10 Year Treasury Yield has spiked over 2 percent; meanwhile, long-term U.S. Treasuries have dealt with consistent pressure (the selling has produced an oversold cluster signal).

Emerging markets were up over 2% on Tuesday and have a strongly bullish posture; several Chinese internet and technology stocks performed well.

Bitcoin has impressively stayed above its 30 day moving average for over a week and has a strongly bullish posture.

Energy remains in the top spot of the Sector Selector; Information Technology dropped back into the bottom spot. Energy was Tuesday’s worst performer (-1.05%), but it remains the strongest from an intermediate posture perspective.

Interest rate-sensitive sectors like Utilities and Real Estate are near their 3 month lows (Real Estate ended with an oversold cluster signal).

Our trade application example featured selling a bear call spread on Microsoft (MSFT) due to it being stuck in an intermediate downtrend, supported by its sector also in its own strongly bearish downtrend (and in last place on the Sector Selector)

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

Stock Market Outlook Video (for February 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.

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