Key Points
- S&P 500 Has a Bullish Trend with Momentum Confirmation
- Small Caps Continue to Rise with Room to the Highs
- The NASDAQ 100 Sees Its Relative Trend Improve Again
- Commodities Remain Above Support but Have Work to Do
- The 10-Year Note Continues to Build a Base
Mid-Week Market Update – United States
The S&P 500 has rallied through the 100-day moving average and has established near-term support at the 4,150 level. Above this mark, the bulls are in control of the trend, and there is running room to the January highs. Below that level, the trend is neutral, with support at the rising 50-day moving average.
The 14-day RSI has become overbought for the first time since November, lending momentum confirmation to the bullish price action.
The S&P Small Cap 600 is above the 50 and 100-day moving averages with near-term support at the 1,250 level. Above this mark, there is room to the November highs. Below it, the summer lows are a key line in the sand to be used to manage risk. Momentum confirms the recent price strength as the 14-day RSI has become overbought for the first time since November.
The relative trend remains neutral, dancing with the 50-day moving average while holding below the key October/November peaks.
The NASDAQ 100 is above the 50 and 100-day moving averages with running room to the highs from late 2021. There is support that can be used to manage risk in the zone between 12,300 and 12,500. The 14-day RSI is breaking from a bearish regime as it rallies to kiss the 70 level.
The relative trend continues to improve, trading above the rising 50-day moving average.
The 10-Year Note continues to battle the 100-day moving average as it builds a base in the area of the 2018 lows. The 50-day moving average has shifted from declining to flat, a sign that downside momentum has stalled.
The 14-day RSI moved above 60, and we are now looking for it to hold 40 on pullbacks to signal that the regime is shifting.
The Bloomberg Commodity Index remains under pressure in the near term while holding above the key support level at 106. The 50-day moving average is proving some support, but the bulls need a move above the 100-day moving average to regain the top position. Momentum has stalled, with the 14-day RSI fading from 60 after becoming oversold in July.
The relative trend is at a key level of support below the 50-day moving average.
Sentiment Check
The CBOE S&P 500 Volatility Index (VIX) and its 10-day moving average continue to trend to the downside, signaling that fear continues to leave the market. The VIX has moved below the 20 level, providing added support to the bullish price trends in U.S. equities.
The ATRs that we track continues to fall across timeframes. The 126-day metric is the last holdout to break the rising trendline. We note that all are now less than 2%. As these metrics trend lower, there is added support to bullish equity trends.
Take-Aways:
Trends in U.S. equities have become incrementally bullish, with the bulls now in top position and clear lines that can be used for risk management. Volatility continues to fall across time frames, an added support for the bullish equity trends. Treasuries continue to build a base above the 2018 lows while commodities remain under short-term pressure.
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