Entering text into the input field will update the search result below

Weekly S&P500 ChartStorm - Bull, Bear, Or Crab Market

May 03, 2020 4:16 PM ETSPDR® S&P 500 ETF Trust (SPY)6 Comments
Topdown Charts profile picture
Topdown Charts


  • The debate between bulls and bears rages on.
  • With little in the way of decisive evidence either way.
  • This week brings in some longer term historical perspective.
  • Sometimes it's a case of bull market or bear market, and other times there is the less talked about "crab market".
  • A long term range-bound market (and there are a many examples across countries and time) could be the non-consensus outcome.

Those who follow my personal account on Twitter will be familiar with my weekly S&P 500 #ChartStorm in which I pick out 10 charts on the S&P 500 to tweet. Typically I'll pick a couple of themes to explore with the charts, but sometimes it's just a selection of charts that will add to your perspective and help inform your own view - whether its bearish, bullish, or something else!

The purpose of this note is to add some extra context and color. It's worth noting that the aim of the #ChartStorm isn't necessarily to arrive at a certain view but to highlight charts and themes worth paying attention to. But inevitably if you keep an eye on the charts they tend to help tell the story, as you will see below.

So here's another S&P 500 #ChartStorm write-up!!

1. Happy new month! For the S&P 500, March’s steep drop (-12.5%) was followed by a sharp April rally (+12.7%) as volatility persists. The monthly chart shows a pattern of increased volatility since 2018. Price has weaved back and forth between the 10-month moving average indicating indecision. Similar trading action was seen during the 2014-2016 period which was characterized as a soft global recession while the US avoided negative growth but still saw lackluster stock market returns.

Many market watchers are waiting to see if this snapback rally, among the most explosive in market history, will find significant resistance. Widely noted last week, the 61.8% Fibonacci retracement from the February peak to the March 23 trough was tagged, followed by a 3.6% drop on Thursday and Friday.

Bottom line: Keep a longer-term perspective. May will provide clues as to the next significant move.

2. March & April asset class returns: US large caps (S&P 500) were among the best performers

This article was written by

Topdown Charts profile picture
Topdown Charts is an independent research firm covering global asset allocation and economics - bringing a chart-driven, top-down approach to investors.  -->> Check out our new entry-level service: https://topdowncharts.substack.com/--We take a top-down, global multi-asset perspective to deliver:Actionable investment ideasRisk management inputMeaningful macro insightsCharts to use in your own work--Our clients include Pension companies, RIAs, Hedge Funds, family offices, insurance firms, and wealth managers and Investment Consultants.--Sign up for exclusive insights:  https://topdowncharts.substack.com/===================================================

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

Comments (6)

Mr. Polymath profile picture
Well reasoned and balanced analysis. Thanks!
excellent writing, thank you
Ronald Dwyer profile picture
The first chart shows that when the S&P500 breaks the 10 month moving average in a bullish manner, it is a very good time to buy.
Topdown Charts profile picture
Indeed, I would say there is a decent amount of people watching that closely (for either a successful or failed attempt).
j. hughes profile picture
On the one hand, then again, on the other hand.
Too many unknowns to make a reasonable assumption.
I have been concentrating on protecting my earned capital even if it means leaving money on the table. I have enough to live on now and do not require the illusion of more to be comfortable. I can't take it with me.
Topdown Charts profile picture
It's a bit like that at this stage. Back in March when valuations were a lot more compelling it was "easy"(er), but now we are sort of in the neutral zone... awaiting data/signals to get a lead on the next move.
Disagree with this article? Submit your own. To report a factual error in this article, . Your feedback matters to us!
To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.