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Sizing Up the S&P 500
- S&P 500 holds above 8/1 high, is now +1.8% in August
- Advance/Decline Line makes a new high
- Note: Failed bounce of August 2023 had lower A/D line
- Price action may resemble November:
- Both had 8 straight positive days, followed by minor pullbacks
- Both saw prices jump 3-4% above 10-day MA. Similar spikes (like November 2022) marked upside turns.
- Potentially bullish intermarket signals:
- 10-year Treasury yield closed 8/21 at the lowest since July 2023
- U.S. Dollar Index at lowest levels since December
- Crude oil futures (@CL) back near lows of the year
- Note: Euro/Yen (EURUSD) may be more effective measure of risk/fear than USDJPY.
News & Views
- BLS revises payrolls down almost 30% for period ended in March
- NY Fed survey shows labor market pessimism.
- Potentially dovish Fed minutes:
- “Vast majority” of policymakers may support rate cut on September 18.
- “Majority … remarked that the risks to the employment goal had increased.”
- Rail traffic +8% (most since June 2021 amid pandemic reopening), intermodal +14%.
- CME FedWatch: 36.5% chance of 50bp cut next month, up from 3.9% a month ago
- Jim Paulsen: Positive GDP and falling inflation favors value and small caps
- S&P Global: Stock Market risk appetite hit 1-year low in August
- Goldman Sachs lowers recession odds after July retail sales beat.
- Mixed economic backdrop may create “Goldilocks” scenario
Volatility Collapse
- Cboe Volatility Index ($VIX.X) fell 51.27 points between 8/5 high and 8/16 low. Biggest 10-day drop since at least 1990.
- Quick analysis can be performed with Custom 1 Line indicators
- Studies → Add Studies → Custom 1 Line
- Go to “Input” and enter:
- plot1(low-high[10]);
Standardized Performances for ETF mentioned above
| ETF | 1 Year | 5 Years | 10 Years |
| SPDR S&P 500 ETF (SPY) | +20.32 | +85.19% | +185.26% |
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