Downloads are available here. TradeStation’s ideas on TradingView are available here.
Check out our next “State of the Market,” on Monday, 8/12.
Sizing Up the S&P 500
- S&P 500 down for 4th straight week, longest negative streak since September 2023.
- 10-day historical volatility reached highest since October 2022.
- Oscillators like Relative Strength Index (RSI), slow stochastics at or near oversold
- Levels:
- 5192: Weekly low from 5/31
- 5120: Near 3/8 weekly close and Monday’s low
- Wednesday’s 0.8% drop was smallest move in a week, occurring at 1st test of 8-day EMA
Volatility Cycle
- Diagram below shows concept for thinking about market turbulence
- Markets tend to move in periods with high volatility and high correlation OR low volatility and low correlation
- Bullish periods give rise to complacency and excessive risk taking, which leads to sharp drops
- Volatility increases during declines and stocks move together (correlation)
- Rebounds are also volatile and correlated, with indexes making large percentage gains
- After a period of rebound, volatility fades and individual stocks move on their own
- Traders may favor index-based products during periods of volatility and individual stocks during periods of calm
News & Views
- VF (VFC) rallies on earnings. Another value turnaround?
- Other examples: LUMN, MMM, MHK, K
- Crude oil inventories tighten more than forecast, gasoline unexpectedly rises.
- Creative Planning: 3-day VIX spike was 3rd biggest ever
- Krinsky of BTIG: Potential bullish contrarian sign in VIX term structure, with spot furthest above 2-month out since October 2008
- JPMorgan, Goldman strategists expect further weakness
- S&P Global: Japan Banks to have record earnings despite recent pullbacks
- S&P Global: U.S. banks have smaller loan-loss provisions than expected
- FactSet: Analysts not cutting estimates despite “recession” talk
Using the Platform
Custom indicator showing change in points: “1d cng pts”
- Basic EasyLanguage logic: close-close[1]
- close = current bar last price
- close[1] = preceding bar’s last price
- May be useful for indicators where percentage change is less informative:
- Treasury yields like $TNX.X or $TYX.X
- Cboe volatility index ($VIX.X)
- Calculated indexes like S&P 500 members making 52-week highs $52WHSP
- Futures contracts
Available in the updated zip file above. High/low range indicators also added.
Upcoming Events
- Tue 8/13: PPI
- Earnings: HD
- Wed 8/14: CPI
- Earnings: CSCO
- Thu 8/15: NAHB housing index
- Earnings: WMT AMAT
- Fri 8/16: Housing starts / building permits
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