After about a month of melt-down this market has spent almost the next month melting up. This week that upward momentum may finally get challenged as the S&P500 is at a significant resistance level. A number of technical resistance indicators are coalescing around the 2900 level.
Of course, to seek order in this market is to court insanity. There is a lot of guessing still going on. Do you fight the fed? How bad is the economy going to get? How out-of-whack are PE ratios? How much more will oil fall?
The truth is, we’re caught somewhere between Federal Reserve helicopter money and a depression-inducing deflation cycle. The Covid debate is becoming the side show as the stock market continues to yo-yo.
Did we already put in a bottom? Is this a v-shaped recovery? Don’t fight the Fed? The stock market is not the economy? Stocks are a leading indicator?
Or is this just a bear-market bull run? Stimulus-filled hope? The bright flash of an economic supernova before we collapse into an economic black hole?
I don’t know the answer. But I can tell you futures were steadily down all Sunday evening, without much whip-saw… Just a slow and steady decline.
For this week, if the trend is negative, markets want to test SPX 2675.
The reality is the numbers easily justify a decline back toward the 2350 level. But this market isn’t exactly playing by valuation right now. We’re dealing with momentum and projections now. Those are tricky masters.
If there’s a small silver lining (which really, this is a rounding error, so not really), the BigFoot database went from only 18% long to 20% long. None of the macros changed from their previous dispositions either. Credit and Market indicators remain in the negative. The Economic macro, while fading, is still in the green.
IMPORTANT DISCLOSURE INFORMATION
Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by BigFoot), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from BigFoot. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. BigFoot is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the BigFoot’s current written disclosure statement discussing our advisory services and fees is available for review upon request.