Stock Market Trades Higher Mid-Week As Nasdaq Bounces

The S&P 500 Index had a strong day on Tuesday closing at its highs of the day and retaking its 30 day moving average.

This is a positive development for the the S&P 500 but the broad index still has a weakly bearish intermediate posture according to the Market Forecast indicator.

The Dow Jones Industrial Average finished higher for the first time in five sessions with back-to-back long lower shadow candles. The Dow Industrials has managed to stay above its rising 30 day moving average during this recent move, but does have a weakly bearish intermediate posture.

The NASDAQ Composite had been struggling the most lately, so it wasn’t surprising to see it bounce back the strongest over the last two days as well.

The NASDAQ finished near its highs, but it still has a strongly bearish intermediate posture and is trading well below its falling 30 day moving average.

The Russell 2000 finished higher by 1.05%, but still has its strongly bearish intermediate posture and is trading slightly below its falling 30 day moving average.

The NASDAQ Composite and Russell 2000 have a “3 Red Arrows” signal.

The U.S. Dollar fell 0.43% on Tuesday (to its worst levels since November), which led to outperformance from commodities; gold was up 1.21% and oil was up 3.56%. We also saw the weak dollar benefit emerging markets (+2.31%) and developed foreign markets (+1.09%)

10-Year Treasury Yields fell for their first time in 2022, ending at 1.74%. Falling yields helped bonds bounce higher after last week’s oversold conditions; Long Term Treasuries rallied 0.67% but still have a strongly bearish posture.

Bitcoin rallied today by a little over 1%, but that seemed disappointing on this “risk-on” day that saw other growth assets bounce back more strongly.

Energy, Financials, and Staples are the only sectors with strongly bullish intermediate postures

Our trade application example featured selling a bull put spread on CF Industries (CF) due to its bullish Near-Term divergence and its CAHOLD (Close Above High Of Low Day) set-up, bouncing up from 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 January 12) – 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.

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