Stock Market Outlook: Price Reversal Versus Bullish Posture

The S&P 500 Index fell by 0.80%; most of the drop occurred in the final hour and it was less than 1% away from an all-time high earlier in the session.

The Dow Jones Industrial Average also broke its 7 day win streak with a loss of 0.38%.

The NASDAQ Composite was the laggard for the 3rd straight day and finished lower by 1.69%; the Russell 2000 fell by 0.60%.

All four major U.S. stock market indices have bullish intermediate confirmation signals using the Market Forecast technical indicator.

The NASDAQ is the only major index to no longer have a “3 Green Arrows” signal due to a loss of momentum, according to the MACD Histogram.

All four major U.S. stock market indices have golden crosses on the 10/40 weekly moving average crossover method.

Like many of the recent high-flying trends, gold came to a screeching halt with a 5.37% sell-off today.

The U.S. Dollar advanced by 0.16%, which pressured commodities, including oil(-1.13%).

Developed foreign stocks managed to close in the green, unlike their U.S. and Emerging Markets counterparts.

Stock Market Video – August 11, 2020

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The 10 Year U.S. Treasury yield had one of its largest bounces in months and finished at 0.65% as bonds finished lower across the board.

With such an abrupt surge in interest rates, it was no surprise that Utilities and REITs performed the worst today and Financials did the best.

The Sector Selector rankings showed a major drop in the Technology sector, which was particularly interesting due to the Market-Cap vs Equal Weight divergence.

Despite today’s sell-off, all sectors continue to have a strongly bullish intermediate posture.

Our trade application example featured selling a put on the commodity silver (SLV) due to today’s sell-off presenting a bullish intermediate confirmation signal.

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Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.