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S&P 500 Hits Two Month High

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U.S. stocks continued the rally that started in late September. On Thursday, the Dow Industrials gained 217 points (1.2%) to extend its rally. The first chart below shows the S&P 500 gaining an even stronger 1.5%. More importantly, the SPX closed at 2023 which exceeded its mid-September intra-day peak at 2020. That put the SPX at a new two month high. The Nasdaq was even stronger.  The middle chart shows the Nasdaq Composite gaining 1.8%, and closing above its 50-day average for the first time since before the market slide in August. The fact that small caps did even better is a good sign. The Russell 2000 Small Cap Index ($RUT) gained 2.2% to regain its 50-day average. All market sectors rose with the biggest gainers in financials (2.4%); a 4% gain in biotechs led a healthcare gain of 2.6%; and energy (1.8%). Consumer discretionary stocks rose 1.2% to regain all of yesterday's losses and more.  All of those gains were extended on Friday.

To top it off, the last chart shows the CBOE Volatility Index ($VIX) falling -10% to close at a two-month low.  The VIX closed below its 200-day average on Thursday and moved lower on Friday. The big question is whether global stock indexes will be able to exceed their 200-day lines in the coming days.

- John Murphy

John Murphy
About the author: is the Chief Technical Analyst at StockCharts.com, a renowned author in the investment field and a former technical analyst for CNBC, and is considered the father of inter-market technical analysis. With over 40 years of market experience, he is the author of numerous popular works including “Technical Analysis of the Financial Markets” and “Trading with Intermarket Analysis”. Before joining StockCharts, John was the technical analyst for CNBC-TV for seven years on the popular show Tech Talk, and has authored three best-selling books on the subject: Technical Analysis of the Financial Markets, Trading with Intermarket Analysis and The Visual Investor. Learn More
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