Weekly S&P500 ChartStorm - 2 October 2022

This week: monthly charts, volatility, sentiment, technicals, market bottoms, bear markets, valuations, IPOs, Big Passive, global equity bearmarketometer...

1. Happy New Month:

The S&P 500 closed September down -9.34% on the month, and is now down -25.25% YTD. In real (CPI adjusted) terms it is back below the pre-pandemic highs.

2. Rate Shock:

2022 has been a story of extreme interest rate volatility. As the rate shock ripples through the economy it's likely that volatility drifts higher across assets.

3. Bear Market Topography:

Just a friendly reminder that bear markets happen across space and time...

4.Stark Sentiment:

No more bulls (aka — a lot of minds that could be changed...)

5. Extreme Oversold:

The 24-month Williams%R Oscillator is showing up increasingly extreme oversold...

...albeit, the early-2000's shows how the market can stay over sold, and 08/09 shows how the market can get even more oversold!

6.Welcome to October:$S&P 500(.SPX)$

Interestinghistorical statisticsobservation — "major market bottoms have occurred in October more than any other month"

(of course that doesn't preclude further downside even if it did bottom in Oct!)

7. Nasdaq Valuations:$NASDAQ 100(NDX)$

The median Price to Sales Ratio across the Nasdaq 100 has almost halved vs the peak (albeit is still almost double what it was a decade ago). Is this enough of a reset? (…especially: is it enough if sales drop and profit margins also correct from record high levels?)

8.When Cheap?

The US PE10 (price vs trailing average 10 years of earnings) valuation is down -31% from the peak (but still 13% above long-term average, and for what it's worth is still 73% above the rest of the world). So the question investors should be asking: “is 30%-off a good deal?“

9.IPO Boom and Bust:

or aka capital markets with vs without excess liquidity…

10. The Rise and Rise of Index Followers: 

“Big Passive” is the top holder of just about every stock now. Is this going to be a problem?

https://chartstorm.substack.com/p/weekly-s-and-p500-chartstorm-2-october

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