It would take a decline in these assets back below their 21-day moving average to suggest that the recent pullback in the index has legs.
Asset flows (near-term bullish): Unlike most of the earlier factors, this one relies on the Nasdaq-100 via the Invesco QQQ exchange-traded fundĪccording to Asbury, net assets flowing into the popular exchange-traded fund have been above their 21-day moving average since July 6.The VIX was pegged at 23.67 Tuesday, up nearly 15% on the week so far. Volatility (near-term bullish): As mentioned earlier, Asbury views a VIX of at least 24 as the line of demarcation between a tactical buying opportunity in the S&P 500 and a sustainable market decline.stocks and stock funds, corporate-bond spreads, trading volume and market breadth. This model is based on six factors: the rate of change in the S&P 500, relative performance in stocks and high-yield bonds, asset flows into U.S. Market internals point higher (near-term bullish): Asbury’s “A6” model of market internals remains biased in favor of further gains for stocks.Whether Amazon breaks above this resistance level, or heads lower first, could have major implications for both Amazon shares, as well as the broader market. stock by market capitalization, recently bounced off an important resistance level (in both cases, the resistance was the 200-day moving average). Movement in influential stocks (near-term bullish, intermediate-term bearish): Like the S&P 500, Inc.,.This trend will remain intact until the S&P 500 tumbles back below 3,946, according to Kosar. Price and trend (near-term bullish, intermediate-term bearish): Despite the sharp decline that started at the end of last week, the S&P 500 still is in a minor tactical uptrend.More details on each of these factors can be found below: Kosar breaks down these into “tactical” factors, or those likely to play out in the coming weeks, and others that are “strategic,” likely to occur in coming months. The reason why is one of the market’s unsolved mysteriesīut there are other factors, most notably investor positioning and seasonality, that suggest the recent pullback could continue. See: The Dow usually slumps in September. Making a sustained run back above 24 to indicate that this week’s pullback in stocks has legs. Until that happens, Kosar said there still are some compelling metrics, including investor sentiment, market breadth, and others, to suggest that stocks won’t immediately return to the June lows. However, Asbury Research ultimately expects selling to continue over the long term, as the bearish trend in stocks that began in January remains intact, even if it has been tested by the summery rally, according to a Tuesday note to clients.Īccording to Kosar, it would take Wall Street’s “fear gauge,” the Cboe Volatility Index,
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