From the desk of Steve Strazza @Sstrazza

Our Top 10 Charts 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.

S&P 500 Tests a Key Level

Equities continue to look vulnerable as sellers remain in full control. When it comes to the major averages, we’ve had our eyes on the AVWAP from the COVID lows. In late April, the Russell 2000 and Nasdaq 100 violated these levels and followed it up with a fresh leg to the downside. Markets have continued to sell off since. 

Today, all eyes are on the S&P 500 which is now challenging its AVWAP from the COVID lows. This level represents the price the average investor has paid since March 2020, making it a critical level of interest.

What this really means is the average buyer since that time is now in a loss position. While this would be a logical place for bulls to step in and stop the carnage, we’re not seeing any sign of it yet. Until we do, be prepared for heightened volatility and further downside.

From the desk of Steve Strazza @Sstrazza

Check out this week's Momentum Report, our weekly summation of all the major indexes at a Macro, International, Sector, and Industry Group level.

By analyzing the short-term data in these reports, we get a more tactical view of the current state of markets. This information then helps us put near-term developments into the big picture context and provides insights regarding the structural trends at play.

Let's jump right into it with some of the major takeaways from this week's report:

* ASC Plus Members can access the Momentum Report by clicking the link at the bottom of this post.

Macro Universe:

Key Takeaway:

From the desk of Willie Delwiche.

This is the video recording of the May 12th Weekly Town Hall w/ Willie Delwiche.

05/12/22 2:00 PM ET

From the desk of Willie Delwiche.

Volatility is on the rise and some of the reactions we’re seeing are entirely predictable.

For instance, I’ve seen multiple versions of this chart shared in recent weeks:

It claims to show how hard it is to effectively time the market. Advisors and strategists use this to scare investors with a seemingly straightforward message: If you miss just a handful of the best days in the market, your returns will suffer.

From the desk of Willie Delwiche.

From the desk of Willie Delwiche.

A risk off environment persists. Leadership areas are coming under pressure as market correlations rise (as they typically do in periods of stress). We are reducing our exposure and move to the sidelines to ride out this period of volatility.

From the desk of Willie Delwiche.

Key Takeaway:

From the desk of Steve Strazza @Sstrazza

Check out this week's Momentum Report, our weekly summation of all the major indexes at a Macro, International, Sector, and Industry Group level.

By analyzing the short-term data in these reports, we get a more tactical view of the current state of markets. This information then helps us put near-term developments into the big picture context and provides insights regarding the structural trends at play.

Let's jump right into it with some of the major takeaways from this week's report:

* ASC Plus Members can access the Momentum Report by clicking the link at the bottom of this post.

Macro Universe:

From the desk of Steve Strazza @Sstrazza

Our Top 10 Charts 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.

Losing Value

Markets have been selling off indiscriminately since last week. Even the strongest stocks are under pressure as we're seeing more and more indexes resolve lower from distribution patterns and violate critical support levels. An excellent example of this is the small cap value ETF (IWN). IWN has successfully defended its range lows for the past several months as its peers have broken down. Now that it has resolved to the downside too, we can add it to our growing list of completed tops. If the strongest can't survive and hold their levels, what does that say about the rest of the market? Long story short, this action is not bullish.