📖 Your Q2 Earnings Guide: Discover the Stocks ProPicks AI Highlights to Jump Post-EarningsRead more

Weekly S&P500 ChartStorm: Risk Driver Review; Check On Tech; Hidden Bear Market

Published 04/18/2022, 12:49 AM
Updated 07/09/2023, 06:31 AM
US500
-
AMZN
-
EPOL
-
MOO
-
LQD
-
TWTR
-
XLU
-
MSCIEF
-
MIWD00000PUS
-
MIEA00000PUS
-
ARKK
-
SPGSCITR
-

This week: risk-driver review, check on tech, retail investor sentiment, the hidden bear market, utility of utilities, agribusiness on the moove, muddy macro, asset valuations..

Welcome to the Weekly S&P500 #ChartStorm. The Chart Storm is a selection of 10 macro/market charts which I hand pick from around the web and post on Twitter (NYSE:TWTR).

The charts focus on the S&P 500 (US equities); and the various forces and factors that influence the outlook—with the aim of bringing insight and perspective.

1. Correction-Drivers Update:

  • iShares MSCI Poland ETF (NYSE:EPOL) (geopolitics proxy): at a stalemate for now
  • iShares iBoxx $ Investment Grade Corporate Bond ETF (NYSE:LQD) (credit/rates): new lows as bond yields spike further
  • ARK Innovation ETF (NYSE:ARKK) [New Tech Fund] (tech burst): drifting further lower

Market itself just resting at support (and below both the 50 & 200dma).

SPX:EPOL:LQD:ARKK Daily Chart

Source: @Callum_Thomas

2. Amazon vs Commodities… Cycle has shifted: Amazon (NASDAQ:AMZN) vs GSCI—unfriendly regime for tech.

Amazon vs Commodities Chart

Source: @exposurerisk

3. The rise and rise of tech... Permanently higher plateau?

Tech Vs S&P 500 Price Relative

Source: @Marlin_Capital

4. Retail Investor Sentiment: Decent correction in sentiment as measured by this indicator, but it’s still quite far from the bottom end of the range.

IMX vs S&P 500 Chart

Source: TD Ameritrade Investor Movement Index

5. The hidden bear market... The headline index itself has not been much to get excited about either way, but under the surface there is a tell-tale sign of weakness and basically for all intents and purposes a hidden bear market.

Consecutive Weeks Of New Highs And Lows

Source: @WillieDelwiche

6. Utilities: Turns out Utilities... have utility in a down market.

(and extra informative that they are outperforming while bond yields are surging)

XLU/SPY Chart

Source: @honeystocks1

7. Agribusiness on the moove: The VanEck Agribusiness ETF (NYSE:MOO) breaking out vs the S&P500 after an extended period of chewing its cud, so to say.

Agribusiness ETF Vs S&P 500 Chart

Source: @AdaptivCharts

8. Supply/Cost Problems: The supposedly transitory problems of supply chain disruption/shortages/COVID/rising costs is still to this day very clearly a major problem for business, based on what companies are saying during their earnings calls.

Supply/Cost Problems

Source: FactSet via @PriapusIQ

9. Economic Forecaster: The famous and clever Economist, Dr S&P500, is forecasting a slump in the ISM manufacturing PMI.

ISM Manufacturing PMI Vs S&P 500 YoY%

Source: @t1alpha

10. Asset Valuations: Commodities the least dirty shirt?

Asset Valuation vs History

Source: @topdowncharts from The 12 Charts to Watch in 2022 [Q2 Update]

BONUS CHART >>

Cyclicals vs Defensives: US cyclicals vs defensives have pushed deeper into new lows. Similarly, the gradual decline for EAFE has accelerated, and EM appear to have put in a lower high. All-up, around the world, cyclicals vs defensives have gone from a source of strength to a source of weakness.

Cyclicals Vs Defensives Chart

And when you zoom out at the global level it looks very clear: this is not a bullish chart. At best maybe markets go sideways, but this is not a situation where the macro/value backdrop is at best (expensive valuations, high inflation, stumbling growth, tightening monetary policy).

Global Cyclicals Vs Defensives Chart

We’ve just been through a period of historical excess, and as the tides come in, so do they go out. Sorry if this is too bearish for you, but I just look at the charts and say what I see. When they facts change, my opinion will change.

Latest comments

Loading next article…
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.