Morning MoneyBeat: Here’s What Will Carry Stocks to Records

Morning MoneyBeat is the Journal’s pre-market primer packed with market updates, insights and must-read news links.

According to John Kosar, director of research at Asbury Research, technical indicators suggest stocks are within weeks of an intermediate-term bottom. He points to the S&P 500’s test of and aggressive rebound off its 200-day moving average this week as evidence of such.

Even so, there is a short list of hurdles the S&P 500 needs to overcome before it resumes its bullish stride, says Mr. Kosar:

  1. The S&P 500 needs to break and remain above an overhead resistance band of 2064 to 2070. The index closed at 2041.51 Wednesday.
  2. The index needs to turn positive on a percentage basis from its same level a month ago.
  3. Exchange-traded fund asset flows need to show sustained improvement, trending above their 21-day moving average. According to Asbury, daily net assets invested in the SPDR S&P 500 ETF declined below their 21-day moving average January 12 to indicate a monthly trend of contraction.
  4. The CBOE Volatility Index needs to drop below its 50-day moving average of roughly 17 and stay there for a few days in order to suggest the market is complacent enough to advance to records. It finished Wednesday at 18.33.

Asbury Research subscribers can read the entire report from which this media quote was excerpted, and access all of our latest research plus an archive of previous reports, by logging into the Research Center.

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