A potential stock market surge could be gearing to happen soon as investors and analysts stay bullish. Some analysts are calling for a bottoming-out soon where price finds itself at a key level of support. Buyers look like they are ready to step in although stuck in volatile behavior that is rocking the discipline of most retail.
Although the market is looking incredibly bearish, it doesn't reflect the strong earnings by major companies. Netflix, however, is a key factor in this recent drop after a miss in the expected subscriber numbers last quarter. The plunge sent the stock down over 21% regardless of the yearly revenue. Net income, and subscribers also grew substantially year-over-year.
A big focus on earnings is going to be big for the market as Proctor and Gamble had an impressive beat. If outlook can be raised on most of the value stocks, we might see a strong foothold on market stability this quarter, although nothing is certain.
The same way earnings can help the market surge, it can also plummet major indices if they come out weaker. Last week's COT suggested a further move to the downside. But after today, we'll get a clearer picture on what institutions are buying.
The 200 DMA has served as a reliable level of support in the past, and it could spark a potential rally if price closes above this level. Again, interest rates are always a concern for the value of stocks going forward. But, major bank and healthcare stocks are pumping out more revenue and income over the past quarter.
A major thing in the short term is this moving average. The movement today will be imperative in the next week as to whether we close above or below the level. The next clean level of support is at $4270 which would be a 3.5% move lower.
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