Our Top 10 report was just published. In this weekly note, we highlight 10 of the most important charts or themes we're currently seeing in asset classes around the world.
Is This Drawdown Any Different?
The S&P 500’s 50-day moving average has garnered some attention this year, and for good reason.
During every month except April, the S&P 500 has tested its 50-day average. Only after the initial test in February did the index fall further below the moving average than where it is today. Every other instance has ended with a sharp reaction higher. Whether that happens this time remains to be seen. With investors re-evaluating their bullish views on stocks, the dollar pressing on new highs, and the action beneath the surface showing increasing vulnerability, bulls want to see more evidence of risk-seeking behavior. Seeing stocks dig in at this key level would be a great place for that to start.
While this moving average is just one indicator, it tells a good story right now. Not only is the S&P at a big level, but as we’ll discuss below - yields, large-cap groups, and even seasonality are at inflection points. These next few weeks will likely reveal some key information for the coming months.
