S&P 500; US Indexes Fundamental Daily Forecast – Did the Selling Stop, or Did Buyers Step In?

U.S. stock indexes have clawed back from steep losses earlier in the session to higher for the session. There was no structure to the move so we can’t say the bottom is in yet. We don’t know if buyers stepped in to turn the market higher, or if sellers quit pressuring prices.

At 0937 GMT, March E-mini S&P 500 Index futures are trading 2635.75, up 28.00 or +1.07%. The low for the session was 2529.00.

March E-mini Dow Jones Industrial Average futures are trading 24000, up 62 or +0.25%. It posted a low at 23088.

March E-mini NASDAQ-100 Index futures are at 6486.50, up 53.25 or +0.83%. This is up from a 6260.25 low.

So far this week, we’ve seen a lot of price action and the return of volatility. The threat of higher rates is real so volatility is likely to stick around. The sell-off the last few days should serve as a wake-up call to all investors that the free ride is over and that they are going to have to work to get good returns moving forward.

Let’s face it, the markets were extremely overbought. Some measures say that about 50% of all American households were invested in the stock market. We haven’t seen this level since the Dot.com bust in the early 2000s.

Can we say the bull market is over? I think there is mounting evidence that the top may be in for the year, but over the long-run, this will be determined by the 10-year Treasury yield.

In my opinion, the intense selling pressure began when the 10-year Treasury yield crossed the 2.70% threshold. At this time, it is holding over this level. If it becomes support or a floor then the markets are going to have a hard time overcoming last month’s highs.

If the 10-year yield creeps up above 3.00% then this will likely lead to an even steep decline since investors will be encouraged to pull money out of the risky stock market and invest it in the government guaranteed note.