Boiler Room: The Official Stock Market Discussion
Futuristic Eskimo
All Star
pair. carry trades breh
Futuristic Eskimo
All Star
double
88m3
Fast Money & Foreign Objects
thanks
Futuristic Eskimo
All Star
S&P 500 May Bottom in Days, Then Rally, Seasonality Charts Show: Analysis
The biggest slump in U.S. stocks since 2011 may end in a matter of days, if long-term price averages are anything to go by, Bloomberg strategist Sejul Gokal writes.
The S&P 500, which slid 6.9 percent last quarter, could reach its lowest point in the current selloff during the first 10 days of this month, before starting a rally into the year-end, so-called seasonality charts based on average daily price changes since 1985 show. A similar graph for the Chicago Board Options Exchange Volatility Index, or VIX, shows volatility tends to peak in early October, before starting to ease.
Any turnaround in U.S. equities in the coming days would recapitulate trends witnessed in 2011, when the market slumped during the July-August period, before stabilizing and bottoming in early October. That low in the S&P 500 was about 2.4 percent down from the bottom point of a downward spike seen in August that year. It also marked a 22 percent plunge from a May high and the end of a 22-week correction.
The current base-case view is for the index to hit a fresh low, without breaking key technical support between 1,814 and 1,821. Were stocks to bottom that way as soon as next week, it would wrap up a 20-week selloff starting from a May high. Should the S&P 500 repeat 2011’s pattern by dropping about 2.4 percent from the year’s low reached in August, that would take it toward 1822, just above the key support.
The S&P 500 saw similar routs and subsequent rebounds in 1998 and 1990. In both the years, the selloff started in late July and slowed in late August through early September, before the gauge touched an early-October low and started rallying from there.
The odds of a stock-market revival in early October are also backed by the “death-cross” chart signal that appeared in late August. While the uncommon pattern, formed when the 50-day moving average crosses below the 200-day moving average, is considered bearish by most technical analysts, it preceded sizable rallies in U.S. stocks in 2010 and 2011.
Other technical patterns that support the odds of an imminent new low and a subsequent rebound in the S&P 500 include the recently completed ‘pennant’ formation with a measured target around 1,835.
The risk to the view is that the index could extend losses if it breaches the technical support at 1.814. In that case, it may slide to the 1,726-1,703 area, which represent the 200-week moving average and a 2009 bull trendline. Such a decline would imply a loss of about 19 percent from the May high. It would also bring the bear-cycle drop even more in line with those seen in 2011, 1998 and 1990.
NOTE: Sejul Gokal is a strategist who writes for Bloomberg. The observations he makes are his own.
grain of salt
The biggest slump in U.S. stocks since 2011 may end in a matter of days, if long-term price averages are anything to go by, Bloomberg strategist Sejul Gokal writes.
The S&P 500, which slid 6.9 percent last quarter, could reach its lowest point in the current selloff during the first 10 days of this month, before starting a rally into the year-end, so-called seasonality charts based on average daily price changes since 1985 show. A similar graph for the Chicago Board Options Exchange Volatility Index, or VIX, shows volatility tends to peak in early October, before starting to ease.
Any turnaround in U.S. equities in the coming days would recapitulate trends witnessed in 2011, when the market slumped during the July-August period, before stabilizing and bottoming in early October. That low in the S&P 500 was about 2.4 percent down from the bottom point of a downward spike seen in August that year. It also marked a 22 percent plunge from a May high and the end of a 22-week correction.
The current base-case view is for the index to hit a fresh low, without breaking key technical support between 1,814 and 1,821. Were stocks to bottom that way as soon as next week, it would wrap up a 20-week selloff starting from a May high. Should the S&P 500 repeat 2011’s pattern by dropping about 2.4 percent from the year’s low reached in August, that would take it toward 1822, just above the key support.
The S&P 500 saw similar routs and subsequent rebounds in 1998 and 1990. In both the years, the selloff started in late July and slowed in late August through early September, before the gauge touched an early-October low and started rallying from there.
The odds of a stock-market revival in early October are also backed by the “death-cross” chart signal that appeared in late August. While the uncommon pattern, formed when the 50-day moving average crosses below the 200-day moving average, is considered bearish by most technical analysts, it preceded sizable rallies in U.S. stocks in 2010 and 2011.
Other technical patterns that support the odds of an imminent new low and a subsequent rebound in the S&P 500 include the recently completed ‘pennant’ formation with a measured target around 1,835.
The risk to the view is that the index could extend losses if it breaches the technical support at 1.814. In that case, it may slide to the 1,726-1,703 area, which represent the 200-week moving average and a 2009 bull trendline. Such a decline would imply a loss of about 19 percent from the May high. It would also bring the bear-cycle drop even more in line with those seen in 2011, 1998 and 1990.
NOTE: Sejul Gokal is a strategist who writes for Bloomberg. The observations he makes are his own.
grain of salt
Domingo Halliburton
Handmade in USA
you betting on a Santa Clause rally?
Futuristic Eskimo
All Star
Im averaging down where I can. Im holding all the positions I have right now long term anyway. Not going to transaction cost myself to death betting the ups and downs.
Domingo Halliburton
Handmade in USA
How did equities rally 60 points off the low on Friday? Everyone.realize the dollar got weak??
I reiterate my reco to short October puts on the vix with strikes in the teens...
Edit: Go long SPX if you're a p*ssy and need a hedge.
I reiterate my reco to short October puts on the vix with strikes in the teens...
Edit: Go long SPX if you're a p*ssy and need a hedge.
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88m3
Fast Money & Foreign Objects
kinda the twilight zone after what I saw today.
the morning was enough to sell then... the bounce
it seems like wages are never going to increase and jobs are absolute nonsense
Domingo Halliburton
Handmade in USA
I'm hearing the word 'secular' thrown around regarding wages
Futuristic Eskimo
All Star
Theres a real lack of people pulling themselves up by their bootstraps and settling for bartending and waitress jobs
Domingo Halliburton
Handmade in USA
Theres a real lack of people pulling themselves up by their bootstraps and settling for bartending and waitress jobs
I defer to the commodity king that I quoted on the last page
Domingo Halliburton
Handmade in USA
Federal reserve practically came out and said the participation rate is so low because people "don't want to work"
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Cashed out today brehs. My heart couldn't take anymore.