Bulls and Bears Battle for Control in the S&P 500

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On Thursday, weak economic data, continued advances in the technology sectors — led by Apple Inc. (NASDAQ:AAPL) — and a recovery in the energy sector all combined to drive the major indices to move higher.

The spotlight, however, was on Apple Inc. and a report that their new iPhone 7 was “sold out.” The stock jumped 3.4% and a total of over 12% in just four sessions.

But gains in the major indices were modest, with the Dow industrials up 1%, the S&P 500 up the same, and the Nasdaq gaining 1.5%. However over the past week the S&P 500 has fallen 1.6% and the Dow is down about 1.45%.

Energy stocks in the S&P 500 rose 1.1%, with crude oil up 0.8% at $43.91 per barrel.

Volatility has increased the closer we get to the Federal Reserve meeting next week, but only a few floor traders expect the Fed to raise rates then. The Bank of England announced that it left its key interest rate unchanged at the news conference following its policy meeting yesterday. However, it suggested that a rate cut in December was still a probability, especially if economic data in Britain remains weak.

At the close the Dow Jones Industrial Average gained 178 points at 18,212, the S&P 500 rose 21 points, closing at 2,147, the Nasdaq gained 76 points at 5,250, and the Russell 2000 closed at 1,227, up 15 points. The NYSE’s primary exchange traded 682 million shares with total volume of 3.3 billion shares, and the Nasdaq crossed 1.9 billion shares.

On the Big Board, advancers outpaced decliners by 3-to-1, and on Nasdaq advancers led by 2.7-to-1. Blocks on the Big Board fell to 4,597 from 4,920 on Wednesday.

S&P Holds at June hi
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Bulls and Bears Battle for Control in the S&P 500

The S&P’s daily chart is representative of almost all of the major indices — on each, the current pullback has been stopped at the June high, a major support line that connects across each chart. The 500’s chart’s importance is heightened by the CBR buy signal from my internal indicator, and it too appears on most other index charts.

Conclusion: The line connecting to the June high is noteworthy but only gives a hint, from the CBR and the fact that most consolidations end in the direction that the pattern was entered, and in this consolidation the direction is UP. However, a high-volume close under this support line would be equally important, signifying that the decline wasn’t over.

Bulls and Bears are wrestling for control at the June high and the strength currently rests with the bulls.

Today’s Trading Landscape

To see a list of the companies reporting earnings today, click here.

For a list of this week’s economic reports due out, click here.


Article printed from InvestorPlace Media, https://investorplace.com/2016/09/bears-bulls-sp-500-control/.

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