Stock Market Swoon Reverses Higher (Bullish Signal)

The S&P 500 Index finished higher by 0.13% on a wild day of trading; it was only the 11th time in the past decade that it was down 1.8% intraday and then closed positive.

The Russell 2000 had the sharpest sell-off (-0.88%) and now has a weakly bearish intermediate posture according to the Market Forecast technical indicator.

The NASDAQ Composite also has a weakly bearish posture; it sold off 0.50% today and finished below its 30 day moving average. It has a “3 Red Arrows” signal; the other indices have mixed signals.

From a factor-perspective, both Value and Dividend Yield are now outperforming Momentum over the past month.

Value stocks have been outperforming Growth stocks since the first week of February.

Commodities continue to outperform stocks; oil hit another multi-month high today. Oil prices held steady allowing energy stocks to lead the way today (+1.65%).

Bitcoin sold off by 7% today, but retains its strongly bullish intermediate posture and continues to trade above a rising 30 day moving average.

Long-term U.S. Treasuries ended with yet another oversold cluster as interest rates have been in a steady surge for months.

Our trade application example featured buying a long call spread on PayPal Inc (PYPL) as a way to help finance a bullish call option on a high-octane stock that has sold off recently and is now sitting right at an important support level (rising 30 day moving average).

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

Stock Market Video – News, Analysis & Insights for February 23

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.

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