It’s been a rough start to the holiday shortened week for the stock market, as pent-up selling desires have caused the major indices to fall strongly across the board; the S&P 500 was lower by 1.84% on Tuesday.
89% of components within the S&P 500 Index finished lower Tuesday; the selling was not only deep, but also broad and wide.
The S&P 500 still has a weakly bearish intermediate posture according to the Market Forecast indicator; it is trading below its rising 30 day moving average.
The Dow Jones Industrial Average sold off the least amount (-1.51%); it has a weakly bearish posture and is trading below its rising 30 DMA.
The NASDAQ Composite fell 2.6% and basically close at new 3-month lows; it has a strongly bearish posture and is trading below its falling 30 DMA.
The Russell 2000 sold off by 3.06% with a strongly bearish intermediate posture; it is trading at 3 month lows and is below its falling 30 day moving average.
All four major stock market indices have a “3 Red Arrows” signal; and the VIX Volatility Index rallied aggressively up to 23.
Emerging markets stocks fell 1.78% today but remain with a strongly bullish intermediate posture (unlike U.S. stocks and foreign developed stocks).
Energy remained atop the Sector Selector tool, with Financials and Consumer Staples rounding out the top 3. Energy was the only sector to finish positive today (+0.40%); Technology was the worst performer (-2.40%). Energy, Financials, and Staples are the only sectors to have strongly bullish intermediate postures.
Our trade application example featured buying a long call that doesn’t expire for over two years on Alibaba (BABA) as a speculative turnaround play due to oversold cluster signals late last year and outperformance above its rising 30 day moving average so far in 2022.
Get market insights, stock trading ideas, and educational instruction over at the Market Scholars website.
Stock Market Outlook Video (for January 19) – 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.
