{"id":53675,"date":"2020-07-16T00:20:14","date_gmt":"2020-07-16T07:20:14","guid":{"rendered":"https:\/\/drduru.com\/onetwentytwo\/?p=53675"},"modified":"2020-07-16T00:53:56","modified_gmt":"2020-07-16T07:53:56","slug":"t2108-update-stock-market-snaps-out-of-bearish-divergence","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2020\/07\/16\/t2108-update-stock-market-snaps-out-of-bearish-divergence\/","title":{"rendered":"Stock Market Snaps Out of Bearish Divergence – Above the 40 (July 15, 2020)"},"content":{"rendered":"\n

Stock Market Statistics<\/strong><\/h2>\n\n\n\n

AT40<\/strong> = 58.8% of stocks are trading above their respective 40-day moving averages (DMAs)
AT200<\/strong> = 30.8% of stocks are trading above their respective 200DMAs
VIX<\/strong> = 27.8
Short-term Trading Call<\/strong>: neutral<\/p>\n\n\n\n

Stock Market Commentary<\/strong><\/h2>\n\n\n\n

I anticipated a shallow sell-off for a downward resolution to the bearish divergence in the stock market<\/a>. However, a day and a half pullback was sharper, shallower, and shorter than I could have projected. I barely had time to review my shopping list of stocks.<\/p>\n\n\n\n

AT40 (T2108)<\/a>, the percentage of stocks trading above their respective 40-day moving averages (DMAs), dropped as low as 32.9% on Tuesday before the stock market snapped out of its brief panic attack. The low 30s is often “close enough” to oversold in a bull market, and the market may have already drawn that line in the sand to end the bearish divergence. Even AT200 (T2107), the percentage of stocks trading above their respective 200DMAs, took on a positive tone with a small breakout to 30.8%.<\/p>\n\n\n\n

The week started with a slew of bad news which headlines and conventional finance media trotted out as explanations for the selling that took the S&P 500 (SPY) down 0.9% and the NASDAQ (COMPQX) down 2.1%: U.S. sanctions against China over its new security law in Hong Kong and incursions into the South China Sea, soaring COVID-19 cases in key U.S. states, fresh news on the soaring U.S. debt, etc… pick the excuse or take all of them. A Tuesday morning gap down brought the concerns over all that negative news to a climactic end. Attention eagerly turned to more good news about a COVID-19 vaccine from Moderna (MDRN)<\/a>.<\/p>\n\n\n\n

The Stock Market Indices<\/strong><\/h3>\n\n\n\n

The S&P 500 (SPY) climbed over its edge and tantalizingly stopped right at its 2019 closing price. The index looks poised for a major breakout that would confirm a fresh buying cycle.<\/p>\n\n\n\n

\"The<\/a>
The S&P 500 (SPY) gained 0.9% in a challenge to the June 8th high.<\/figcaption><\/figure><\/div>\n\n\n\n