August 14, 2022

Volatility Reports Tension before Panic

Truth, like light, blinds. Falsehood, on the contrary, is a beautiful twilight that enhances every object.

Data points from the Twittersphere

1. “The Nasdaq Composite Is Back in a Bull Market” WSJ
2. Up 6 weeks in a row.. big intra-week buying each time {see CT chart}
3. Weekly Mkt Mood: Risk-On, Very clean risk-on week w/stocks, commodities higher and bonds and $ lower, VIX snapped its 1-yr uptrend as investors suddenly feel ok w/ 8.5% inflation, Many reasons to think though after ~150+ $SPX points more, it could all come undone,
4. S&P 500 has now reclaimed more than 50% of its bear market decline since January
5. Comparing the current S&P 500 rally to rallies in the 2000-02 and 2007-09 bear market’s 200dma.
6. Just putting this out there for people to see that for the indices (not individual stocks), declining volume is typical of advances like now. Reversal days, off a low, might show higher total volume, but don’t expect that for an up-trending market.
7. 50 DMA Disparity Index, the highest level since Oct ’20.
8. U.S. tech stocks are poised for their longest weekly winning streak since November 2021
9. There is no way prices from 20 years ago still matter, right? Information Technology Sector/SP (ratio) is hitting the same level as 20 years ago and being rebuffed
10. $XLF – Financials did well this week. 2nd best performing sector behind energy $XLE 11. On a relative basis gained some ground this week both on a market cap ( $XLF vs. $SPX ) and equal weight basis ( $RYF vs. $RSP )

Some of the posts lack a takeaway, like #2 “Up 6 weeks in a row.. big intra-week buying each time.”  It reminded me of the top on November 19, 2021 (closing high) preceded by six weeks of advance.

This work by Jack Cahn is licensed under a Creative Commons Attribution-NonCommercial 4.0 International