Major US indices snatch victory from the jaws of defeat

US stocks opened lower on the back of the Israel/Hamas bombing over the weekend. However, momentum faded and the indices started to reverse higher. Although the US bond market was closed, US bond futures did rally (lower yields), implying a decline in yields (flight to safety flows).

Fed officials, although concerned about inflation, did comment that rate rises were tightening for the Fed. The expectations for a rate hike moved lower:

  • 14% in NOvember vs 16% earlier today (and above 30% on Friday)
  • Price of cut moved to June 2024 vs July earlier today

A snapshot of the closing level shows:

  • Dow industrial average up 197.05 points or 0.59% at 33604.64
  • S&P index up 27.16 points or 0.63% at 4335.65
  • NASDAQ index up 52.89 points or 0.39% at 13484.23

Looking at the NASDAQ index chart below, it is inching closer to its 100-day moving average at 13581.89 currently. Back on September 20 the price closed right near the 100-day moving average (blue line on the chart below), but gapped to lower on the very next day. The price has not been above the 100-day moving average since then.

A move above the 100 day moving average (blue line in the chart below) this week is needed to increase the bullish bias from a technical perspective. Staying below, would keep the sellers in play.

NASDAQ index moves closer to its 100 day moving average

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