Stock Market Outlook Tainted By Volatility Influx

The S&P 500 Index has been volatile following Monday’s heavy selling. Tuesday saw the index fall by -0.08%. And overnight futures are pointing higher.

Market breadth was worse than Tuesday’s break-even results suggested, with 2/3 of the S&P 500 components finishing in the red.

The S&P 500 continues to trade below its falling 30 day moving average and has a strongly bearish Market Forecast intermediate posture.

The Dow Jones Industrial Average was once again the laggard (-0.15%); it continues to have a strongly bearish posture that it received a couple weeks ago.

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

The NASDAQ Composite was once again our leader (+0.22%); it’s the only major index to have a weakly bearish posture (as opposed to strongly bearish). The NASDAQ Composite is also the only major index to not have a “3 Red Arrows” signal due to its improvement on the Stochastic indicator.

Long Term U.S. Treasuries were down slightly Tuesday (-0.09%), but have been viewed as a relative safe haven recently and are trading near 3-month highs. The U.S. Dollar is a similar story to Treasuries; both continue to trade above rising 30 day moving averages and have strongly bullish intermediate postures.

Gold still has a strongly bearish posture, but it’s been up the last two days while the stock market has been down, confirming its safe haven status.

Bitcoin has broken down in the last two days, suggesting it is still being viewed as a speculative asset; it now has a weakly bearish posture.

Health Care remains atop the Sector Selector rankings; Energy also moved higher but there’s a strong chance its ranking drifts lower if markets remain bearish.

Our trade application example featured selling a put on Clorox (CLX) due to its oversold cluster signal on a weekly candle chart; this type of trade attempts to buy the stock at a more attractive valuation and dividend yield down the road

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

Stock Market Outlook Video (for September 22) – 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.