Simon has over six years of professional trading experience across FX, commodities and equities. He has a strong passion for financial markets and is particularly focused on price action trading
The Vanguard Total Stock Market Index Fund ETF (NYSEARCA: VTI) is set to close the week trading exactly on the 50-day EMA line, a strong indication that we could get a rally in US stocks next week.
The VTI has struggled to break above the 50-day EMA, which would indicate the start of a new bullish run in US stocks, but has traded right on the 50-EMA line for two days now.
The VTI gapped up to the 50-day EMA following yesterday’s massive rally among US stocks driven by the short-term debt ceiling extension up to December as a compromise solution to give both parties time to agree on contentious issues.
Yesterday’s rally was driven by companies such as Twitter, which rose 4.4%, General Motors, which rose 4.7% and AMD, which posted a 2.7% gain.
The Dow rose approximately 1%, with the Nasdaq composite increasing 1.1%, the Russel 2000 was up 1.5%, with the S&P 500 lagging the other indices with a mere 0.4% gain.
The VTI’s rally today was hampered by the week US nonfarm payrolls, which came in at 194,000 new jobs, compared to analysts expectations of the country adding at least 500,000 new jobs.
However, investors cheered that the unemployment rate fell to 4.8%, beating consensus estimates set at 5.1%. It was impressive to see most US stock indices trade sideways with minimal gains.
The Dow was up 0.07% (25.98 points), while the Nasdaq was up 0.09% (13 points), and the S&P 500 was up 0.1% (4.62 points) at publishing.
Still, the VTI is holding steady at the 50-day EMA is a positive sign, but I would wait until Monday to see if the ETF can trade above the EMA line, indicating a new bullish phase could be on the cards.
While we cannot guarantee a stock market rally come next week, the odds favour a rally more than a decline since the VTI has traded at the 50-day EMA for two consecutive days, meaning that it is well supported.
*This is not investment advice. Always do your due diligence before making investment decisions.
VTI stock price.
VTI stock price is trading right at the 50-day EMA and could be headed higher shortly.
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