Stock Market Outlook Clouded By Poor Retail Sales Data and Emerging Markets

July Retail Sales data disappointed investors, who sent the stock market down over 1% for much of the day Tuesday. However, a fairly strong rally into the closing bell limited losses. Futures for Wednesday morning are mixed.

Elsewhere on Tuesday, the S&P 500 Index fell 0.71%, which was its first down day in the last week. The index continues to have a strongly bullish intermediate posture according to the Market Forecast. The Dow Jones Industrial Average did not achieve an all-time high for the first day in over a week, closing down by 0.79%. It has “3 Green Arrows” signal and a strongly bullish intermediate posture. The NASDAQ Composite fell 0.93%; it is barely hanging on to its strongly bullish posture and is now trading below its falling 30 day moving average. The Russell 2000 fell the most (-1.19%); it still has a weakly bearish posture and is also trading below its falling 30 day moving average

Emerging markets were punished by Chinese stocks once again; they remain in a strongly bearish intermediate posture and are at a 3-month closing low. Developed foreign markets and U.S. stocks are faring better, with strongly bullish postures and trading above rising 30 day moving averages

The U.S. Dollar had a strong day, finishing higher by 0.60% and nearing a resistance break-out from the last few weeks. It currently has a strongly bullish intermediate posture.

Gold (-0.15%) and crude oil (-0.98%) both finished lower and are trading below their falling 30 day moving averages.

Health Care (XLV) was Tuesday’s sector star (+1.18%). It was up even when the rest of the market was at its lows and it closed at the highs of the day. Consumer Discretionary (XLY) was the day’s sector loser (-2.37%), due to heavy influence from TSLA and HD, which both underperformed the market.

Our trade application example featured selling a bear call spread on Delta Airlines (DAL) due to it bouncing down and away from its falling 30 day moving average along with printing a new bearish intermediate posture after today’s sell-off

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

Stock Market Outlook Video (for August 18) – 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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