Stock Market Outlook Remains Uncertain On Price Volatility

The S&P 500 Index moved more than 1% (either up or down) for the fourth consecutive session on Tuesday. That marks the first time that has happened since November. And stock market futures for Wednesday are looking volatile once again…

While the S&P 500 sold off a bit into the close, it still managed a decent 1.05% gain on Tuesday and nearly erased Monday’s losses. 73% of the components within the S&P 500 closed higher, with some of the only consistent selling taking place within the Real Estate and Utilities sectors.

Despite Tuesday’s rally, the S&P 500 continues to have a strongly bearish intermediate posture according to the Market Forecast technical indicator.

The Dow Jones Industrial Average also rallied (+0.92%) bringing about a slight intermediate posture change from strongly bearish to weakly bullish. The Dow Jones Industrial Average earned a green arrow on the Stochastic indicator.

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The NASDAQ Composite was the day’s biggest index winner with a snapback of 1.25%, but that’s likely due to it being the worst performer in recent weeks. The Russell 2000 was the day’s smallest winner (+0.49%); it continues to have a weakly bearish posture and is the only index with a rising 30 day moving average.

Commodities and Currencies…

Bitcoin rallied 5% and suddenly finds itself with a 3-month breakout and strongly bullish intermediate posture. The U.S. Dollar and Treasury Yields remain correlated; both closed higher and continue to have strongly bullish postures. Gold sold off 0.47% in the shadow of Dollar strength, but it remains with its weakly bullish posture (despite a falling 30 day moving average).

Oil has been one of this market’s leaders; it closed up for the fourth straight session and is at multi-month highs with a strongly bullish posture. Energy and Financials moved higher in the most recent Sector Selector and are ranked #1 and #2, respectively.

Commodities have clearly been outperforming both stocks and bonds since August 20th according to our ratio charts.

Our trade application example featured a bullish swing trade on Dynavax Technologies (DVAX) due to its bullish Near-Term divergence and its bounce up and off of its rising 30 day moving average

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

Stock Market Outlook Video (for October 6) – 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.