U.S. Stock Market Rallies, But Red Flags Exist

The S&P 500 Index INDEXSP:.INX rose 1.05% but it continues to have a strongly bearish intermediate posture according to the Market Forecast technical indicator.

Tuesday’s biggest winner was the NASDAQ Composite (+1.71%) as many of the year’s previous stock winners (work-from-home, cloud, social media, etc.) reasserted themselves.

It’s concerning though that all four major U.S. stock market indices have strongly bearish intermediate postures and are trading below the declining 30-day moving averages.

As well, all four major U.S. stock market indices have weakly bearish Market Sentiment and bearish “3 Red Arrows” signals.

On the positive side, all four major U.S. stock market indices still have golden crosses (10 week moving averages above 40 week moving averages).

The Momentum factor led all other factors today, but it remains below the 30 day moving average.

Stock Market Video – News, Analysis & Insights

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

The VIX Volatility Index fell to 27, the U.S. Dollar strengthened, and gold broke down below support.

U.S. stocks outperformed foreign stocks today, even though they’ve underperformed in previous weeks.

All sectors have bearish intermediate postures. Discretionary, Technology, and Communications were the day’s winners; Energy and Financials lagged.

Our trade application example featured a bullish swing trade on Kimberly Clark (KMB) due to its bullish Near-Term Divergence and CAHOLD (Close Above High Of Low Day) pattern.

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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