Market Insights

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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Performance data shown reflects past performance and is no guarantee of future performance. The information provided is not meant to predict or project the performance of a specific investment or investment strategy and current performance may be lower or higher than the performance data shown. Accordingly, this information should not be relied upon when making an investment decision.