The stock market closed with bullish price reversals Thursday, as a couple of other positive chart signals indicated this week's selling is abating, at least.
XThe Nasdaq composite rose 1.1%, the S&P 500 0.8% and the Dow Jones Industrial Average 0.5%.
The market's bounce was more impressive when you take into consideration the long tail of losses the indexes erased. At session lows, the Nasdaq and S&P 500 were off 1.1%.
The bullish price reversal builds on a couple of other positive signals. The put-call volume ratio shot up above 1.2 Wednesday. Such elevated readings of investor fear occurred around market lows in December, late May and August.
In a third positive sign, the Nasdaq and Dow found support after pulling back to their 200-day moving averages. Both indexes made lows around that level a few times earlier this year.
Volume was lower compared with Wednesday's totals, according to preliminary figures. Advancing stocks led decliners by about a 9-5 ratio on the NYSE and by 8-to-5 on the Nasdaq.
Small Caps Lag Stock Market Gains
Small caps also reversed higher but did not climb as much as other indexes. The iShares Russell 2000 ETF (IWM) ended with a 0.2% increase after falling as much as 1.6%.
Despite sellers' retreat, there was only one notable breakout Thursday. Zyntex (ZYXI) topped the 11.45 buy point of a cup-with-handle base in heavy volume. The maker of medical devices for pain management and other treatments said its orders soared 95% in the third quarter from the year-ago period.
Remember, the stock market hasn't done enough yet to be regarded in a fully invested condition. IBD's market outlook remains "uptrend under pressure." Hot spots such as the U.S.-China trade war, geopolitical risks and political uncertainty remain significant threats to Wall Street.
Leading stocks outperformed. The Innovator IBD 50 ETF (FFTY) climbed 1.4%. About 15 of the 50 stocks rose 2% or more, including software, retail and financial components.
Several IBD 50 stocks appear to be finding support at the 50-day line. Copart (CPRT) recovered back above its 50-day average, but remains below its 79.84 buy point. The move back above the 50-day line was an encouraging sign.
Edwards Lifesciences (EW) stood out, as the stock rose from support at the 50-day moving average. Edwards was added to IBD Leaderboard.
Juan Carlos Arancibia is the Markets Editor of IBD and oversees our market coverage. Follow him at @IBD_jarancibia
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