Broad Stock Market Back To Familiar Area
While the S&P 500 (via SPDR S&P 500 (NYSE:SPY)) was able to push to a new high during Monday’s trading session, the broad NYSE Composite Stock Index (via Vanguard Total Stock Market (NYSE:VTI)) was still looking for a close above an area that acted as resistance in the past.
Are Stocks Set To Rocket Higher?
This week’s video looks at the narrative for stocks breaking out and pushing higher, as well as the impact of slowing credit growth on asset class behavior.
Stocks vs. Bonds Near Key Trendline
Like the NYSE Composite, the ratio of the S&P 500 (SPY) to a diversified basket of bonds (via iShares Core US Aggregate Bond (NYSE:AGG)) was testing a key area Monday. If the ratio can push above the downward-sloping blue trendline, it would be a positive development for stocks relative to bonds.
Conversely, if the ratio fails to push/hold above the blue line, it increases the odds that Monday’s stock breakout may be followed by relatively tepid price action.