The 50-day on the S&P 500 was once again defended. Households’ equity exposure is on course for yet another high in 3Q, even as margin debt jumped to yet another record in August. Amidst these signs of excesses, the Fed … Continued
After dropping by a decent amount last week, major US equity indices are headed for a test of nearby support, which in the case of the S&P 500 is merely 0.8 percent away. Over the past 16 months, bulls’ mettle … Continued
VIX recently broke a month-and-a-half rising trend line, subsequently coming under more pressure. In the right circumstances for volatility bears, the index could drop more near term, but a longer-term trend line support is unlikely to break. On June 29, … Continued
The 2Q earnings season has gotten off strong. Stocks, having already rallied big into it, yawned. This is coming at a time when sentiment remains effusive and some of the tailwinds potentially turning into headwinds. VIX’s monthly chart could be … Continued
Corporate bond issuance was strong in the first half. High-yield, in particular, is on course for yet another record year. The Fed essentially provided a backstop to corporate bonds in March last year, setting ablaze risk-on sentiment. Corporate profits are … Continued
Buybacks made a comeback in 1Q21. Nonetheless, they are no longer as strong a tailwind for equities as they were in 2018 and 2019. Margin debt and foreigners continue to support stocks, and will pose problems once they turn. S&P … Continued
The energizer bunny marches on. The S&P 500 rallied to a fresh high last week. This time around, the otherwise-laggard Nasdaq 100 joined in, meekly breaking out to a new high. Next week, the top six tech outfits are set … Continued
Two months into the year, January and February have traded similarly – early strength followed by weakness in the dying sessions. Equity bulls’ inability to hold on to gains comes amidst a spike in long rates. Short rates are behaving, … Continued
Last March, the Fed essentially urged investors to take on risk and go up the risk curve. They have obliged. Leverage is high in the system. This works as long as the prevailing upward momentum is in place. When a … Continued
Major US equity indices posted new highs last week, but only to reverse and give back those gains. By Friday, the S&P 500, the Nasdaq 100 and the Russell 2000 were all sitting on channel support. Bulls cannot afford a … Continued