Stock Market Outlook Clouded By Volatility

Stock market volatility continues as prices move up and down on a daily basis creating frustration for investors.

The S&P 500 Index fell by 1.55% on Tuesday, as the market continued to grapple with the Russia/Ukraine situation, rising commodity prices, and falling interest rates.

The S&P 500 had over 80% of its components close lower Tuesday, so the selling was broad-based and breadth was weak.

All four major U.S. equity indices closed lower on Tuesday and are once again trading below their falling 30 day moving averages. And all four major equity indices have weakly bullish intermediate postures according to the Market Forecast technical indicator (as of Tuesday close).

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The VIX Volatility Index rallied back up to 33; Tuesday could be defined as a risk-off day as capital was seeking safety.

One of Tuesday’s most impactful stories was the money flow into U.S. Treasury bonds(+1.02%), which resulted in the 10-year Treasury Yield falling to 1.70%. Gold was up on Tuesday as well.

Oil continues to respond aggressively to the possibility of Russian supply coming off the market for much of the developed world.

Bitcoin is also rallying aggressively due to it being a possible money transfer alternative in Russia; it has a strongly bullish posture and is above its rising 30 DMA.

The Russian stock market has collapsed 70% over the past 3 months, with most of the damage done just within the last week. Emerging markets finished lower by 1.33% on Tuesday.

Energy remains atop the Sector Selector tool; Materials are starting to make nice a move higher (with most of the strength specifically within the Metals & Mining industry).

By far and away, the worst sector was Financials (-3.69%), which suffered from a fall in interest rates and now has a strongly bearish intermediate posture.

Our trade application example featured selling a put on J.P. Morgan (JMP) due to it getting sold off so strongly, it now has an oversold cluster on a daily candle chart; it is also nearing a historically-attractive dividend yield area and our put-sale would allow for a 4% dividend yield if it was assigned.

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

Stock Market Outlook Video (for March 2) – 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.