• Investing
  • Stock
Round Table Thoughts
  • Economy
  • Editor’s Pick
Home Stock Financial Upswing: Understanding the Stock Market Rally and Yield Rise
Stock

Financial Upswing: Understanding the Stock Market Rally and Yield Rise

by November 22, 2024
by November 22, 2024 0 comment
Share
0
FacebookTwitterPinterestWhatsapp

The afternoon turnaround seems to be more the norm than the exception. Thursday’s stock market action followed the trend. What makes Thursday’s turnaround more pronounced is a possible resumption of the uptrend in equities. But not all stocks are created equal.

A look at the day’s MarketCarpet of the S&P 500 stocks shows an interesting mix. While there was more green than red, some of the heavier-weighted S&P 500 stocks—Microsoft Corp. (MSFT), Apple, Inc. (AAPL), Alphabet, Inc. (GOOGL), Amazon.com, Inc. (AMZN), Meta Platforms, Inc. (META), and Tesla, Inc. (TSLA)—were trading lower. NVIDIA Corp. (NVDA) managed to eke out a slightly higher close despite its sharp drop after reporting earnings after Wednesday’s close. Earnings and revenues beat expectations, but the market may have had higher expectations. NVDA’s 0.53% gain didn’t move the needle much in Thursday’s positive move.

FIGURE 1.  MARKETCARPET FOR THURSDAY, NOVEMBER 21. A lot of green, but not from the heavily weighted large-cap stocks.Image source: StockCharts.com. For educational purposes.

An initial glance at the MarketCarpet screams the need to view the chart of the S&P 500 Equal Weighted Index ($SPXEW).

Technical Support Holds

Comparing the chart of $SPX with $SPXEW shows that the latter made a bigger move on Thursday. Regardless, both indexes bounced above their 25-day simple moving averages (SMAs).

FIGURE 2. S&P 500 VS. S&P 500 EQUAL-WEIGHTED INDEX. The S&P 500 rebounded and closed higher toward the top end of the day’s range. Most of the heavily weighted stocks in the index closed lower, so it’s no surprise that the S&P 500 Equal-Weighted Index made a more significant move.Chart source: StockChartsACP. For educational purposes.

The positive slope of both indicates the uptrend is still in play. Both are close to their 52-week highs (see lower panel). The $SPXEW is only 0.54% from its high whereas the $SPX is 0.88% away.

It’s a similar scenario with the Nasdaq Composite ($COMPQ) and Nasdaq 100 Equal-Weighted Index ($NDXE), although Thursday’s upside move was much smaller than that of the S&P 500 (see chart below).

FIGURE 3: NASDAQ COMPOSITE VS. NASDAQ 100 EQUAL-WEIGHTED INDEX. Both indexes are above their 25-day SMAs, which have a positive slope. Both are also close to their all-time highs.Chart source: StockChartsACP. For educational purposes.

$COMPQ and $NDXE are trending higher (their 25-day SMAs are trending higher), but the last bar in $NDXE shows more upside movement. Both indexes are approaching their 52-week highs—$COMPQ is 1.72% away, while $NDXE is 0.99% away.

The Nasdaq Composite chart shows some selling pressure, but it’s trading above its July high. If it maintains that position, going forward, it will be bullish for the index.

Even though the Dow Jones Industrial Average ($INDU) may not be as popular as it once was, it, out of the three major equity indexes, rose the most, closing up by 1.06%. It, too, had a turnaround day, bouncing off its 25-day SMA on Tuesday, and is also approaching an all-time high.

The biggest winners were small and mid-caps. The S&P 400 Mid Cap Index ($MID) and S&P 600 Small Cap Index ($SML) are both above their November lows and approaching their all-time highs (see chart below).

FIGURE 4. MID CAPS VS. SMALL CAPS. Both indexes had significant moves on Thursday. The trend continues to be bullish and both are approaching their all-time highs.Chart source: StockChartsACP. For educational purposes.

The Extended Factors Dashboard panel shows the mid-cap revenue and momentum ETFs were Thursday’s top percentage movers.

FIGURE 5. EXTENDED FACTORS DASHBOARD PANEL. Mid-cap revenue and momentum were the largest percentage winners on Thursday.Image source: StockCharts.com. For educational purposes.

The big-picture view of the equity markets: After the post-election pullback, equities seem to be making a comeback. The big question is whether they will have the momentum to break above their all-time highs.

The Bond Market’s Narrative

While equities are rising, you can’t ignore what’s happening in the bond market. Treasury yields are climbing in tandem with equities. This is mainly due to strong economic growth and concerns of possible inflation with the new administration’s implementation of tariffs and tax cuts. We’ve already heard the CEO of Walmart chime in with his concerns about consumers having to pay more due to tariffs.

As yields rise, bond prices fall. The daily chart of the iShares 20+ Year Treasury Bond ETF (TLT) below shows that since September 17, TLT has fallen over 12%. That was around the time the Federal Reserve announced a 50 basis point interest rate cut.

FIGURE 6. DAILY CHART OF TLT. TLT fell over 12% since September 17, which is around the time the Fed cut interest rates by 50 basis points.Image source: StockCharts.com. For educational purposes.

Closing Bell

While the macroeconomic picture is positive, investors are concerned about the possibility of reinflation, especially if tariffs are implemented. We’re still a few months away from January 20, so it wouldn’t be surprising to see more choppiness in the stock and bond market from now until the end of the year.

Geopolitical tensions could also rise. If the trend in equities continues to be bullish, just stay your course and hold on to your positions. But if there’s any change, such as a negative slope in your preferred moving average or a decline in market breadth, it may be time to unload some of your positions and have some cash sitting on the sidelines.

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.

You Might Also Like
  • U.S. Oil Reserves Drop to 40-Year Lows
  • Markets: Week 1, Week 2 — What’s Next in Week 3?
  • The Ord Oracle January 31, 2023
  • DP Trading Room: What’s Up With Semiconductors?
Share
0
FacebookTwitterPinterestWhatsapp

previous post
Bonds Get Death Cross SELL Signal
next post
CFPB expands oversight of digital payments services including Apple Pay and Cash App

You may also like

A STRONG Week for Equities and Internet Stocks SOAR!

February 2, 2024

Top 5 Stocks in “Go” Trends | Fri May 17,...

May 17, 2024

GNG TV: “Building” Go Trends in US Equities

May 18, 2023

DP Trading Room: Technology On Its Way Down?

July 11, 2023

Is the Big Move Real? Or Just a Quick AI-Generated...

May 26, 2023

Will This Be THE Break?

January 27, 2023

Tug of War

March 17, 2023

Sector Spotlight: Timeless Knowledge and Insights into Sector Rotation &...

December 13, 2023

Three Charts to Track Impending Doom

January 6, 2024

#1 Rule in Multiple Timeframes

March 2, 2023

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Krispy Kreme stock plunges after doughnut chain pauses McDonald’s rollout, pulls outlook

      May 8, 2025
    • Don’t Buy Robinhood Stock… Until You See This Chart Setup

      May 8, 2025
    • UnitedHealthcare sued by shareholders over reaction to CEO’s killing

      May 8, 2025
    • The Unpredictable Stock Market: How to Make Sense of It

      May 8, 2025
    • AMD CEO calls China a ‘large opportunity’ and warns against strict U.S. chip controls

      May 7, 2025

    Popular Posts

    • 1

      Trump-era China sanctions ended by Biden may be...

      June 27, 2024 2,630 views
    • 2

      Walz’s honeymoon with China gets fresh scrutiny as...

      August 9, 2024 2,339 views
    • 3

      Biden appointee played key role in recruiting Chinese...

      June 25, 2024 2,320 views
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful...

      July 10, 2024 2,302 views
    • 5

      Harris VP pick spent years promoting research facility...

      August 29, 2024 2,185 views

    Categories

    • Economy (7,009)
    • Editor's Pick (2,066)
    • Investing (538)
    • Stock (2,530)

    Popular Posts

    • 1

      Trump-era China sanctions ended by Biden may be revived under new House GOP bill

      June 27, 2024
    • 2

      Walz’s honeymoon with China gets fresh scrutiny as Harris camp blasts ‘lying’ critics

      August 9, 2024
    • 3

      Biden appointee played key role in recruiting Chinese businesses to Delaware: ‘Longtime friends’

      June 25, 2024
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful of Chinese spy threats

      July 10, 2024
    • 5

      Harris VP pick spent years promoting research facility that collaborated with ‘Chinese military company’

      August 29, 2024

    Latest News

    • Krispy Kreme stock plunges after doughnut chain pauses McDonald’s rollout,...

      May 8, 2025
    • Don’t Buy Robinhood Stock… Until You See This Chart Setup

      May 8, 2025
    • UnitedHealthcare sued by shareholders over reaction to CEO’s killing

      May 8, 2025

    Categories

    • Economy (7,009)
    • Editor's Pick (2,066)
    • Investing (538)
    • Stock (2,530)

    Disclaimer: RoundTableThoughts.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2024 RoundTableThoughts.com. All Rights Reserved.

    Round Table Thoughts
    • Investing
    • Stock
    Round Table Thoughts
    • Economy
    • Editor’s Pick

    Read alsox

    Daily Briefing Notes for the Market

    May 8, 2023

    New Industry Group Golden Cross Indexes...

    February 4, 2023

    Why This MA is So Powerful

    February 16, 2023
    Sign In

    Keep me signed in until I sign out

    Forgot your password?

    Password Recovery

    A new password will be emailed to you.

    Have received a new password? Login here