Stock Market Outlook: Pullback Damage Minimal Thus Far

The S&P 500 Index fell by 0.66% on Tuesday after it was learned that the China/U.S. Phase 1 portion of the trade deal might not get done in December as anticipated.

But on Wednesday, the market staged a rally, bouncing back.

Despite the long-anticipated near-term pullback experienced in the last few days, the intermediate posture of all four major stock market indices remains bullish at this time.

The Dow Jones Industrial Average is the index most likely to pivot to a bearish intermediate posture first; it was the only index to close below its 30 day moving average on Tuesday.

The Dow Jones Industrial Average is also the only major U.S. stock market index to currently have a “3 Red Arrows” signal.

All four major U.S. stock market indices have bullish 10-40 weekly moving average crossover signals.

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

Stock Market Video – December 4, 2019

Additional market insights:

The cyclical sectors, which are considered more sensitive to the trade war talks, currently have bearish postures (Discretionary, Industrials, Materials, and Energy).

The Technology sector fell 3 slots in the Sector Selector rankings over the weekend; Health Care rose into the Top 3 of the rankings for the first time in several months.

Our trade application example featured selling a bull put spread on Tesla (TSLA), which has excellent relative strength and rose the last two days during the same time the broad market was falling.

Twitter:  @BrandonVanZee and @Market_Scholars 

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.

Sign up for our FREE newsletter
and receive our best trading ideas and research