Market Insights

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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

Exchange Traded Funds (“ETFs”) are subject to management fees and other expenses. Before making investment decisions, investors should carefully read information found in the prospectus or summary prospectus, if available, including investment objectives, risks, charges, and expenses. Click here to find the prospectus. 

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. 

Security futures are not suitable for all investors. To obtain a copy of the security futures risk disclosure statement visit www.TradeStation.com/DisclosureFutures.