Market Outlook™ – 12/06/19
Today’s Market Outlook:
With a strong trading range, the S&P 500® rose more than 289 points and came close to producing a new all-time high after its first 1+% decline in weeks. The intermediate posture remains weakly bearish for a second day but its long-term Market Sentiment line crossed into the upper-reversal zone, which suggests a strong bullish intermediate trend. The near-term line also reached overbought territory. This is a good sign for bulls – especially if the S&P eventually reaches a new high on this near-term run. Otherwise, expect short near-term moves higher and lower over the next week or two. On its weekly chart, the S&P formed an overbought cluster weeks after its weekly near-term line crossed above the chart’s midpoint. The cluster includes the weekly Market Sentiment line. This pattern suggests lower expected returns from this point going forward. The Russell 2000® came close to forming the same weekly pattern and is forming a potential bearish near-term divergence. Both major indexes formed long lower shadows on their weekly candles.