The S&P 500 Index bounced 1.78% on Tuesday (after three prior days of selling).
Although the index closed lower than where it was trading a couple days ago, investors hope the momentum continues into the holidays.
85% of the components within the S&P 500 closed higher on Tuesday; the only areas sitting out the rally were defensive/non-cyclical sectors. The move was strong enough to switch its Market Forecast intermediate posture back to strongly bullish, due to the index closing near its daily high.
All major U.S. equity indices continue to trade below their falling 30 day moving averages, however, the S&P 500 appears to be first in line to cross it to the upside.
The NASDAQ Composite vaulted 2.4% higher on Tuesday; its Market Forecast intermediate posture shifted back to weakly bullish.
The Dow Jones Industrial Average rallied 1.6%, but continues to have a weakly bearish intermediate posture.
The Russell 2000 has been beat up the most in recent months, so it wasn’t surprising to see it rally the most on Tuesday (2.95%); that said, it is still considered strongly bearish.
The Russell 2000 has a somewhat rare bearish intermediate confirmation signal (suggesting to sell the rips).
Treasury yields rallied strongly, with the 10 Year Yield closing at 1.48%. Bonds sold off in most cases; however, High Yield (aka Junk) Bonds rallied alongside oil prices Tuesday. Oil popped higher by over 3% as market participants were in a “risk-on” mindset once again.
Real Estate, Consumer Staples, and Health Care all have strongly bullish intermediate postures.
Financials, Consumer Discretionary, and Industrials all have strongly bearish intermediate postures.
Our trade application example featured a sold put on Corning Inc (GLW) due to its Bullish Near-Term Divergence signal, its potential double bottom, and its appearance within the attractively-priced blue zone on our Dividend Stairstep chart
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Stock Market Outlook Video (for December 22) – News and Analysis
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.