The stock market rose again on Friday, but is not out of the woods yet.
The S&P 500 rose 1.5% and the Dow Jones Industrial Average rose 641 points, or 1.5%. The Nasdaq Composite rose 1.5%.
The Dow was on track for the day, its worst week since 2023. Even accounting for today's gains, the blue-chip index is on track to drop 825 points this week, which would be its worst week since October 25th. The Nasdaq will have its worst week since Nov. 15, according to Dow Jones Market Data.
On this day, 478 stocks in the S&P 500 rose, and the index's consecutive negative streak will come to an end in 14 days. The streak dates back to Dec. 31, 1999, and the previous longest streak was 10 days in 2000, according to figures from Dow Jones Market Data.
From a technical perspective, S&P was experiencing what is called an outside day. This means that the low of today's trading range is lower than yesterday's low, but it also means that today's high is higher than yesterday's high.
“A strong day outside could mean a trend reversal, especially after the recession the day before,” said Frank Cappellelli, founder of technical analysis firm CappThesis. Barons. “This can also be called a bullish engulfing pattern. Both have bullish implications.”
Cappellelli said the key will be whether the market can realize further gains. He said if Wall Street chooses to sell next week, it will create a “significant lower price” compared to the S&P's Dec. 6 high.
“And if that happens, the price action over the past few weeks will resemble a large underlying bearish pattern,” Cappellelli explains. “This is always a concern when we see significant profit-taking after a strong stock market performance.However, over the past two years, even the biggest bearish patterns have not been broken. It helps maintain it.”
JC O'Hara, chief technical strategist at ROTH, said: Barons The importance of outdoor days comes down to market psychology and buyer and seller searches.
“Traders tried to push the stock higher on Thursday (futures also rose, and were slightly positive), but they quickly ran out of steam and closed lower, which is unfortunate,” O'Hara said. “That move showed that the bears were still in control. In boxing, it's the equivalent of getting knocked down and then getting hit in the face with a hard left jab the moment you get back up.”
Things could change today, especially if SPDR S&P 500 ETF Trust (SPY) closes above yesterday's high of $591.
“To use a boxing analogy, a boxer goes down, gets back up, takes another jab to the face, and just lands a powerful two-punch combo,” O'Hara said. “His legs look strong now.”
