Will Rising Interest Rates Halt Stock Market Rally?

The S&P 500 Index finished flat (-0.06%) and hit a new intraday all-time high earlier in the session. The Dow Jones Industrial Average was the only major index to finish higher (+0.20%) and closed at a new all-time high.

The Russell 2000 fell 0.72% today, but closed with a bullish intermediate confirmation signal.

All four major U.S. stock market indices continue to have strongly bullish intermediate postures according to the Market Forecast.

All four major U.S. stock market indices have “3 Green Arrows” signals on daily charts, and “golden crosses” on their 10/40 weekly moving average charts.

The surge in interest rates was once of the biggest stories of the day.

U.S. Treasuries and foreign bonds remain in downtrends and exhibit strongly bearish intermediate postures; both ended with oversold clusters. High yield bonds continue to hold up better, due to their correlation with oil prices, which are up 40% in the last 3 months.

Oil may have benefitted from supply disruptions due to cold weather around the refineries in Texas; Energy was the day’s top-performing sector. Gold was sold off hard today in favor of bitcoin, which touched $50,000 for the first time ever

Miscellaneous market insights…

Meanwhile, foreign stocks outperformed U.S. stocks. And value stocks have been outperforming growth stocks since the beginning of February. As well, commodities are stronger than stocks and bonds.

Our trade application example featured selling a put on Cisco Systems (CSCO) due to its positioning on our dividend stairstep chart, which suggests it’s not quite at an attractive level to purchase for the long-term, but its close enough to sell a put with the possibility of getting a more adequate long entry.

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

Stock Market Video – News, Analysis & Insights for February 16

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.

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