Market Outlook – 08/08/18
Today, the S&P 500® closed lower by less than one point on light trading volume. The intermediate line continued higher into the upper-reversal zone. On the other hand, the momentum line dropped down to oversold territory. This combination is called a bullish intermediate confirmation signal. This is a short-term buy signal. The near-term line has been above the chart’s midpoint for 5 days, which suggests this bounce signal may keep stocks elevated for another few trading sessions before we see another near-term pullback. Long-term Market Sentiment is also strongly bullish. The other major indexes show similar patterns with the NASDAQ Composite catching up to the other major indexes with a strong bullish posture and the Russell 2000® showing a strengthening bullish trend. Short-term sentiment is showing a potential red flag for small-cap stocks.