Weekly S&P 500 ChartStorm: Stock Stats; Bear Market Rallies; Risk Indicators

May 29, 2022

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Welcome to the Weekly S&P500 #ChartStorm—a collection of 10 charts which I hand decide from across the internet and publish on Twitter.

These charts deal with the (US equities); and the assorted forces and components that affect the outlook – with the goal of bringing perception and perspective.

1. Scintillating Inventory Market Statistics: The market was up 6% final week. Traditionally, on common, subsequent returns have been optimistic more often than not, and sometimes materially so.

(albeit observe the outliers/exceptions: 2008 monetary disaster, 1974 inflation shock, early-2000’s dot-com bubble bursting, and 1980 when Fed Chair Volcker hiked the financial system into recession to get inflation beneath management…)

S&P 500 Weekly Gains

Supply: @RyanDetrick

2. Recession Session: By way of Recessionary vs Non-Recessionary inventory market corrections, it positive does appear like we’re skewing towards the recessionary finish of the size on this chart. However the important thing level is that the reply as as to if that is going to be a extra drawn out and deeper bear market will rely on recession: sure or no.

Supply: @SamRo through @ISABELNET_SA

3. Bear Market Rallies: Watch out for the #BearMarketRally

As a reminder, if that is really a bear market that we’re in proper now, it is going to possible function quite a few and really seductive and really complicated bear market rallies.

Good for buying and selling/positioning, however can be a lure.

Bear Market Rallies

Supply: @MichaelKantro

4. Upside-Draw back Ups and Downs: This is the rolling counts of maximum upside vs draw back volatility (% modifications above/under a sure threshold: the unique was every day and 1% +/- threshold). I discussed this indicator a , and @exposurerisk has run with this different indicator, dubbing it the Thomas Counts.

However anyway, the important thing level is it places on clear show the shifts in market regime from upside frenzy to draw back worry. It is charts like this (and the macro backdrop) that make me assume we’re nonetheless early within the bear part, and that this does symbolize a market regime change quite than a reversion to “purchase the dip“.

SPY vs Thomas Counts

Supply: @exposurerisk

5. Valuation Heights: Some people are already saying “Hello, Worth” …whereas others are nonetheless saying “Excessive Worth!” In the meantime, I take a look at this chart and say it nonetheless seems to be a methods to go earlier than all of the excesses are labored by means of.

US Stocks Valuation

Supply: @MichaelAArouet

6. S&P 500 Job Listings: Look at this chart, seems to be just like the labor increase has peaked…

“complete new job postings for the S&P 500 firms additional fell in April to 853K, the bottom degree since July 2021”

Supply: @MikeZaccardi @RevelioLabs

7. Peak Issues—Provide Chain Version: Looks as if firms are beginning to complain much less about provide chain points… peak provide chain issues?

Stated it earlier than: one solution to repair provide chain issues is to repair (stimulus-driven) extra demand: in any case, taken to the intense: no demand = no backlogs. And that is what is going to get the inexperienced line down.

Source: @FactSet

8. Nice Rotation: solely remark I’ve on this one (it speaks for itself) is to remind you that this chart is benchmark-relative… and the benchmark continues to be heavily skewed to these techy sectors (darkish blue line).

Great Rotation

Supply: @Mayhem4Markets

9. Retail Over and Out: Possibly a grim paraphrasing of the time period from final week ““ to “Liquidate and Chill”

Retail Over And Out

Supply: @zerohedge

10. European Equities: 2008 or 2011?

(the final occasions sentiment was in 2008 when it foreshadowed a a lot deeper fall to return, but in addition in 2011 the place it fell in reflection of actual macro challenges however the inventory market ranged and stagnated for a bit quite than crashing additional …keep in mind, bull markets and bear markets are usually not the one reply: crab markets are additionally a factor (the place markets simply vary and go sideways)

Supply: @topdowncharts

BONUS CHART >> bought to incorporate a goody for the goodies who subscribed.

Macro Sentiment and the Inventory Market: One of many issues we have to keep in mind is that the macro backdrop has been steadily worsening over the previous 12 months, and it represents a flip or a coming full-circle of the momentous macro backdrop that we loved within the wake of the pandemic stimulus packages.

This chart exhibits world equities (, in native forex phrases) towards a composite of macro-related sentiment indicators from Consensus Inc. (Treasuries, commodities, currencies, equities). Key level is it’s gone from excessive optimism to now barely net-bearish.

Now, some would possibly say it is a good and good wholesome reset. However my expertise is that sentiment indicators like this don’t simply reset all the way down to impartial after which take-off once more, they often overshoot, get washed out, after which flip up when one thing within the macro really modifications (i.e. often when the financial coverage cycles flip).

Additionally, technicians ought to have picked up that the indicator made a decrease excessive whereas the index made the next excessive—a traditional bearish divergence.

Sample recognizers may even observe that it sort of seems to be eerily just like 2008.

All that is to say I don’t assume we’re out of the woods simply but. I don’t assume we get let off that frivolously after such a protracted (and extra not too long ago: preposterous) interval of extra. Proceed with warning.



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