Stock Market Outlook: Rally Neutralizes Bears

The S&P 500 rallied 1.13% today; this was the fifth time in the last six trading days that it rallied over 1% (hasn’t happened since November 2020).

While the mega cap growth stocks stole the spotlight, market breadth was strong with 72% of S&P 500 components closing higher today.

All four major stock market indices have a strongly bullish posture; the Dow Jones Industrial Average is the only index not trading above a rising 30 day moving average.

The NASDAQ Composite was the day’s biggest winner (+1.95%); the Dow Jones lagged with an advance of just 0.74%.

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The Russell 2000 was up 1.08% today; it had its highest close since January 18th and is still this market’s intermediate-term leader.

The VIX Volatility Index fell to 23 as the markets have been in rally mode over the past week.

The U.S. 10-Year Treasury yield rallied yet again; it closed at 2.37%; its highest level in nearly 3 years. Bond prices fell in response to rising rates; the Long Term U.S. Treasuries ETF fell by 1.28% and again has an oversold cluster signal.

Gold fell 0.73% while oil fell 1.23%; oil has bounced nicely over the past week and has a strongly bullish posture (gold has flatlined).

Bitcoin had an unremarkable day, but continues to trade slightly above its 30 day moving average and has a strongly bullish posture.

Emerging markets (+1.81%) bested developed foreign markets (+0.94%) today and have been trading better on positive recent China news flow.

Energy remains on top of the Sector Selector tool; Consumer Staples took the biggest tumble in the rankings last week.

All market-cap weighted sector ETFs have a bullish intermediate posture; Communications and Staples are considered weakly bullish. The only sector lower today was Energy (-0.74%); Consumer Staples is the only sector still trading below a falling 30 day moving average. The day’s best sector was Consumer Discretionary (+2.48%), which was heavily influenced by Tesla (TSLA) which opened a German factory and rallied 8%.

Our trade application example featured a short sale on Graco Inc (GGG) due to a bearish engulfing pattern, a switch to a bearish Near-Term posture, and a close lower than the close of the recent high day (yesterday).

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

Stock Market Outlook Video (for March 23) – 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.