Stock Market Review

The stock markets continue to be volatile this earnings season. If the Google results lifted the markets 2 days back, it seems the Meta results are going to be a downer today. On the inflation and interest rates front, it seems the markets have now baked in 4 rate hikes this year. So, it is only earnings at play now. Of course, there is the Russia situation as well as the mid-term elections coming up.

I want to look at the price trends, both from a short-term perspective as well as a long-term perspective.

The 1-month chart of S&P 500 with the short-term moving averages indicates a strong upswing over the last 4 trading days. The price has rallied and crossed over the 10-day and the 20-day moving average. That is good of course. However, the price is still below the 50-day moving average and also the 10-day is below the 20-day moving average. So, there is some positive and some negative giving us a neutral rating for now.

Checking the long-term price trend indicators, I see that the price has risen over both the 200-day and the 100-day moving averages. It is important to note that the price has fallen and crossed below both of those moving averages before turning back.

So, from the immediate perspective, I would say we are not out of the woods. We need to see if the price can hold these levels and continue to move up to a safety zone well above the 100-day and the 200-day moving averages. The next few trading days will give us better indication. For now, I would say wait and watch.

The NASDAQ long-term trends look worse actually:

We see the price is hovering below the 200-day, 100-day and the 50-day moving averages. Plus, the 50-day just crossed below the 100-day moving average.

The Dow Jones is actually the best of the 3 with price tracing back over all the long-term moving averages.

So, overall, I am skeptical about the price action I am seeing and will wait and watch what happens in the coming days as the earnings season closes.