This week: technical check, recession trading, sentiment snippets, flows, positioning, strategist split, central banks, mid-cap stocks, economic vs market sentiment...
Welcome to the Weekly S&P500$S&P 500(.SPX)$ #ChartStorm— a selection of 10 charts which I hand pick from around the web and post on Twitter$Twitter(TWTR)$ .
These charts focus on the S&P500 (US equities); and the various forces and factors that influence the outlook - with the aim of bringing insight and perspective.
Hope you enjoy!
1. “Let’s Take This Offline“
First glance, this looks short-term bearish. That downtrend line has basically been confirmed, and that blue support line has been breached. With the Fed showing no signs of slowing down (and yet the economy showing many signs of slowing down), we could easily see a revisiting of the lows.
2. Recession Trading
By my read, recession seems a near certainty at this point given how (ALL OF) the leading indicators I track are looking. So it's not likely to be a straightforward process for the market in establishing a sustainable longer-term base given how it usually trades through recessions.
3. Stocks vs Economy
But then again, stocks usually bottom before the economy does... as I often remind readers, and while I pay close attention to macro-fundamentals along with price action; "(almost always, but with some exceptions) price moves faster than fundamentals".
4. Advisor Bullishness
Bye Bye Bulls = Buy Buy Bulls?
Newsletter writer bullishness has dropped to a point where some of the major market bottoms have been found historically. Looking further out maybe this will be one of those situations. That said, tomorrow’s history can be re-written at any time.
5. Individual Investor Bearishness
Similar thing, but a different survey (AAII), and this time looking at the bears — same energy.
6. Ebbs and Flows
Despite all the bearishness (and lack of bullishness), we’re still not seeing flows reverse all that much. No capitulation here.
7. Household Equity (over?)Allocations
Similar vibe, household equity allocations remain near record-highs (despite surveyed bearish feelings). Makes me think to, when rates were zero there was no alternative, but now there are many alternatives... will we see some portfolio rebalancing as bond yields and cash rates go up?
8. Strategist Disagreement Indicator
Turns out S&P 500 Price Target variance among Strategists is the highest since 2009 — says a lot!
9. Central Banks vs Stocks
It’s like the old market saying — “Don't fight the Fed, the ECB, the Bank of England, the SNB.....”
10. Valuations
US Mid-Cap equity valuations are not “mid”
https://chartstorm.substack.com/p/weekly-s-and-p500-chartstorm-18-december
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