S&P 2013-08-14

 BarroMetrics Views:S&P 2013-08-14

On the S&P’s, there is a great piece at: http://www.zerohedge.com/news/2013-08-13/guest-post-are-we-re-tracing-market-peak

As for me: I look at four main heads of information:

  1. Price
  2. Volume
  3. Sentiment
  4. Time

In each case, I see signs of a possible top, provided we see shaken the market’s false belief that the FED’s can keep the stock market afloat indefinitely.

  • Figure 1 (price and volume) shows that the S&P has been trading a range, 1672 to 1710, since July 16. Yesterday’s price action suggests a move to the Primary Sell Zone is next on the cards. The key here the break to new highs has so far seen little follow-through. This is usually a bearish sign.
  • My sentiment indicators are calling for top – we even saw, in the Sports section of the Financial Times, a piece on the creeping S&P bull – the Sports section for goodness sakes!
  • Time wise, we have a seasonal high due early to mid September.

But all this is moot with the prevailing sentiment. In that regard, we are seeing possible cracks – the FED is speaking of tapering, there seems to be a push for Summers (in favour of QE ending) to be appointed Fed Chief; but my bet is still on some Black Swan event. Perhaps the Fed Budget debate which comes to a head in September?

So far, all has been quiet on that front. The Democrats and Republicans will need to get a move on if they are to resolve the issues without causing market ripples.

sp-05d.png

FIGURE 1 S&P Normalised Volume

2 thoughts on “S&P 2013-08-14”

  1. Hi Paul

    a) sentiment – my perception of the extent of the bullish or bearish conviction

    b) measures for S&P:

    1) SentimenTrader
    2) COT (proprietary)
    3) VIX
    4) Headlines from Newspapers, Magazines etc

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