A positive close on Thursday but the risk adverse were clearly hedging their bets into the long weekend.
The Qs continue to underperform SPY as can be seen from the M3 reports below.
XIV is ranked #1 in both cases suggesting a short volatility strategy for now although the SPY short term ALERT appears to be reversing.
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The S&P 500 continues to lead the action in terms of holding above its 50-day average. But with the other major indexes still below their respective 50-days, some give back next week after the strong bounce seems reasonable. Caution is still warranted as we approach the previous resistance area. While end of April may still provide some support, will traders start looking at sell in May early?
The VIX plunged and XIV soared….a breakout day for bullish indicators and a possible sign of things to come. The lateral consolidation pattern still prevails in many sectors although energy (XLE) is hitting new highs each day and prices at the gas pumps reflect it. Read the rest of this entry »
While the US equities markets have been under pressure the SMALL WORLD model has managed to hold its own and then some by remaining vested in EEM (emerging markets) and VGK and EWG.
While the returns are not wildly exciting the fact that the model managed to outperform SPY and keep on the right side of the equity curve highlights the advantages of using a multi-model approach for capital allocation and risk management.
The 2-day bounce in stocks on lower volume was sold hard end of the week. Friday it feels like we are right back to where we left off on Monday as the selling intensifies. Many high growth stocks are getting hit hard, as well as biotechs which are down across the board. Aside from the S&P 500, the NASDAQ, small- and mid-cap indexes remain below their 50-day averages and near the 200-day. As such, S&P may continue to follow lower.