Stock Market Outlook Clouded By Rates, Inflation, Volatility

The S&P 500 fell 0.34% on Tuesday as inflation came in ultra-hot (8.5% YoY). Initially, stocks popped over 1 percent but then the sellers took over and pushed stocks into the red. To be sure, we are in a period of heightened price volatility.

The S&P 500 Index is now trading below its rising 30 day moving average and has a weakly bearish posture. The Dow Jones Industrials also has a weakly bearish posture despite being above their rising 30 day moving average.

In tech-land, the NASDAQ Composite has a weakly bearish posture. And it is trading below its falling 30 day moving average.

The Russell 2000 actually closed positive on Tuesday but it’s the only major index to have a strongly bearish intermediate posture.

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Elsewhere, the U.S. 10-Year Treasury yield fell for the first time in eight trading sessions; it settled at 2.72% and is still strongly bullish. The U.S. Dollar rallied 0.34% (its ninth straight day without a loss); it’s at a new yearly high and has a strongly bullish intermediate posture

Looking at commodities, Gold and Oil both rallied nicely on Tuesday and both are now above the rising 30 day moving average. That said, gold has a bullish posture and oil is still bearish.

Energy has now been atop the Sector Selector tool for over three straight months; Health Care cracked the Top 4 for the first time in several months.

Our trade application example featured a selling a put on Starbucks Corp (SBUX) due to its recent sell-off giving it an oversold cluster (on weekly chart) and putting it closer to a rare 3% dividend yield where investors have historically formed a bottom

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

Stock Market Outlook Video (for April 13) – 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.