The S&P 500 has experienced five consecutive days of moves exceeding +1% or -1%.
Here’s the chart:
Let's break down what the chart shows:
The blue line in the top panel is the S&P 500 index price.
The black line in the middle panel indicates consecutive days when the S&P 500 experienced a daily movement of +1% or -1%.
The red line in the bottom panel is the S&P 500’s 52-week drawdown.
The vertical gray lines indicate consecutive days when the S&P 500 experienced a daily movement of +1% or -1% is greater than 5.
The Takeaway: We have experienced five consecutive days of 1% movements, either up or down, in the S&P 500. This marks the longest period of market volatility since August of last year.
During this current period of volatility, we have seen a consistent trend of more stocks reaching new lows than new highs, alongside a significant rise in bearish market sentiment.
Over 10% of stocks on the NYSE+NASDAQ are making new lows.
Here’s the chart:
Let's break down what the chart shows:
The blue line in the top panel is the S&P 500 index price.
The black line in the bottom panelshows the percentage of NYSE+NASDAQ 52-week new highs minus new lows.
The Takeaway: We have a saying here at All Star Charts… The stock market can only decline with an expansion in the new lows list, it's simple math… and you know what… The number of stocks making new lows is higher than the number of stocks making new highs.
Yesterday, among the 7,422 stocks listed on the NYSE and NASDAQ, 997 made new 52-week lows, while only 101 achieved new 52-week highs.
That's 11.8% relative to new highs and over 13% new lows on an absolute basis.
My Risk-On/Risk-Off ratio has sharply declined recently and returned to levels when the ratio peaked and fell into a consolidation period back in 2021.
Here’s the chart:
Let's break down what the chart shows:
The black line is my Risk-On/Risk-Off ratio.
The Risk-On components consist of Copper (HG1), High Yield Bonds (JNK), Aussie Dollar (AUDUSD), Semiconductors (SOXX/SPY) & High Beta (SPHB/SPY).
The Risk-Off components consist of Gold (GC1), US Treasury Bonds (TLT), Yen (JPYUSD), Utilities (XLU/SPY) & Staples (XLP/SPY).
The Takeaway: Investors are experiencing fear and pessimism, as bearish sentiment dominates the surveys. The US market is beginning to mirror this mood, showing a preference for a Risk-Off environment. This is reflected in my Risk-On/Risk-Off ratio, which has returned to a key level of importance where we saw NYSE breadth reach its peak in 2021.
Will this resistance level, which has turned into support, continue to act as support, or will this ratio...
