{"id":56275,"date":"2021-03-21T13:00:00","date_gmt":"2021-03-21T20:00:00","guid":{"rendered":"https:\/\/drduru.com\/onetwentytwo\/?p=56275"},"modified":"2021-03-21T15:49:08","modified_gmt":"2021-03-21T22:49:08","slug":"t2108-update-stock-market-continues-to-digest-inflation-fears","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2021\/03\/21\/t2108-update-stock-market-continues-to-digest-inflation-fears\/","title":{"rendered":"The Stock Market Continues to Digest Inflation Fears – Above the 40 (March 19, 2021)"},"content":{"rendered":"\n

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

A great stock market divergence<\/a> continued last week. However, the market overall is looking more and more resilient as it continues to digest inflation fears. Even the biggest victim of the great divergence, the NASDAQ (COMPQX), remains well above its lows for the month.<\/p>\n\n\n\n

A very dovish session with Federal Reserve Chair Jay Powell<\/a> stoked a market rally and carved an important breakdown for the volatility index (VIX). Powell provided zero assurance that the Fed planned to interfere with the rise in long-term bond yields. However, he also insisted that inflation expectations<\/strong> would regardless remain well-anchored around 2%. Still, in classic post-Fed style, the market next day faded the initial post-Fed reaction before stabilizing on Friday. With the NASDAQ down for the month while the S&P 500, small caps, and financials remain up for the month, inflation fears are starting to wane as a broad-based catalyst for market weakness. Instead, the on-going churn looks like digestion rather than crippling heartburn.<\/p>\n\n\n\n

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

The S&P 500 (SPY) ended the previous week with an all-time closing high. The index hit two more all-time highs last week before wobbling into a successful test of support at the flattening 20-day moving average (DMA) (dotted line below).<\/p>\n\n\n\n

\"The<\/a>
The S&P 500<\/a> (SPY) bounced perfectly off 20DMA support.<\/em><\/strong><\/figcaption><\/figure><\/div>\n\n\n\n

The NASDAQ (COMPQX) pivoted around its 50DMA (red line below) for 5 trading days before stumbling into a fresh 50DMA breakdown. Friday’s buyers saved the tech-laden index from confirming the breakdown.Accordingly, the NASDAQ is safe from a test of the March lows for now.<\/p>\n\n\n\n

\"The<\/a>
The <\/b>NASDAQ<\/a> (COMPQX) <\/b>gained 0.8% and avoided confirming a 50DMA breakdown.<\/em><\/strong><\/figcaption><\/figure><\/div>\n\n\n\n