S&P 500: Not Down & Out Like Most Suggest

Recap: Week of January 6, 2019

S&P 500: Not Down & Out Like Most Suggest, that is how I want to start this weeks blog post.

While it is true that a lot of damage has been done, and investors are smarting (off 12% from the highs…yikes!), we may be at a point where further selling is modest. If anything, sideways chop might be the more likely outcome as the market works through all of the price action from the last couple of months.

Here is my technical interpretation of the S&P 500 followed by some other data points that are rather optimistic.

  • For the above scenario to remain intact, 2523 needs to hold
  • A more neutral view is for prices to simply chop sideways for an extended period…an investors nightmare
  • Only below 2300 would I have to draw a completely different outlook

The charts below offer a different way to view the current market.

  • Previous times we were at these levels, the S&P’s rallied
  • And when the VIX has fallen faster than realized volatility, the S&P’s rallied

Closed Trades:

  • Short USD/CNH +1400 pips
  • Long NZD/USD +90 pips
  • Long EUR/GBP -118 pips
  • Long USO +11.6%
  • Short S&P 500 – 0.62%
  • Long S&P 500 +3.2%
  • Short 10-year notes +0.50%

Open Trades 

  • CAD/JPY
  • EUR/NOK
  • Gold via GLD
  • SC
  • TSLA

Trades On Our Radar:

  • USD/MXN
  • USD/CNH
  • EEM

Additional Reading/Listening:

REMINDER: Early Bird Pricing Ends on January 20th for the 2019 Trader’s Round Table

Have a question for me? Just ask.

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