In our prior article, we looked at volatility-based probable price ranges for SPY (the proxy for the S&P 500 index). In this article, we extend that review to include several other key asset categories:
- S&P 500 index itself
- S&P 1500 Dividend Aristocrats ETF
- Russell 2000 Small-Cap Stocks ETF
- MSCI Emerging Markets Stocks ETF
- EuroZone Stocks ETF
- FTSE/XINHUA 25 China ETF
- Gold Bullion ETF
- Intermediate-Term Investment Grade Corporate Bonds ETF
Prices Relative To Bear Market Price Levels:
It's not a very good looking picture.
Emerging markets, the EuroZone and China are in bear markets, based on a 20% drop from the high as a bear market definition. The EuroZone is nearly 19% below the bear market threshold, and China is more than 9% below the bear market threshold. Emerging markets have just gone below the bear threshold.
The EuroZone is about 4% lower now than it was at the depth of the Greek crisis last year.
Gold is less than 3% above the bear threshold.
The US is in decline lately, but is in a much better position relative to bear market levels that other major parts of the world.
The S&P 500 is almost 13% above the bear level. Dividend Aristocrats are nearly 15% above the bear level, and small-cap stocks are 8% above that threshold.
That US pattern is typical of a troubled market, with high quality dividend stock in somewhat better shape than the S&P 500, and small-cap stocks in worse shape than the S&P 500.
Figure 1: Gold Bullion (GLD)
The explanation of the various plot lines for GLD contained in the chart image are the same for the subsequent charts. Rather than repeating the explanation of price probability cones each time we post charts using them, we prepared an explanation on our blog that is included here by reference.
Figure 3: S&P 1500 Dividend Aristocrats (SDY)
Figure 4: Russell 2000 Small-Cap (IWM)
Figure 5: MSCI Emerging Markets Stocks (EEM)
Figure 6: EuroZone Stocks (EZU)
Figure 7: China FTSE/XINHUA 25 (FXI)
Figure 8: Intermediate-Term Inv. Grade Corporates (LQD)
Figure 9: Price Levels for Plots
Figure 10: Percent Change Required To Reach Price Level Plots
Disclosure: QVM has positions in SPY as of the creation date of this article (May 18, 2012).
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