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
- 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%
- Gold via GLD
Trades On Our Radar:
- I highly recommend you listen to this interview with Chris Cole of Artemis Capital. A super sharp guy as he discusses the next BIG ONE volatility event. Listen now.
- Good article with Jim Stack, a sharp guy who is consistently good with his ‘calls’ – Housing bear who called 2018 slowdown says worst yet to come
Have a question for me? Just ask.