On a down day like Tuesday, 4/5/2016, it helps to have additional analysis tools, observations, discussions, debates … and a time horizon longer than the next two seconds. First up, Chart #1, the daily cumulative percentage change chart below, as of 8/21/15 thru 4/4/2016, is calculated off the rise and fall of the S&P 500 close, on the percentage change since 8/21/15. Note: On 8/21/15, the S&P 500 closed at its low of 1970.89 points. Here, the chart implies Mr. & Ms. Fickle Markets begin taking profits, selling, shorting, et cetera, when the S&P 500 close gets above 5%, …. and a smidge over 7% is the upper limit. So, the +5% target to watch is 2069.44 points. You know the story. On Friday, 4/1/16, the S&P 500 closed at 2072.78. On Monday, 4/4/2016, the S&P 500, after rising to 2074.02, closed at 2066.13. The S&P 500 +7% target to watch is 2110.82. On the downside, the buyers come back in when the close is near or below -5%, and the lower limit appears to be -7.2%. So the -5% target to watch is 1872.35. The lower limit to watch is 1828.99. … At this time, these numbers suit the buy-hold-sell game plan.
The above chart, chart #2, looks at the cumulative changes, on a percentage basis, of the S&P 500 and the Volatility S&P500 (INDEX CBOE: VIX). Like they say … a picture is worth a thousand words.
Chart #3, looks at the cumulative changes, on a percentage basis, of the S&P 500 (red) and the CBOE Interest Rate 10 Year T Note (INDEX CBOE: TNX) (lt. green). This is interesting … we have a divergence. Interest rates are declining while stocks are trending up. It would appear the global markets realize the Fed has little, to no wiggle room, to raise rates. Based on the dividend yield of the S&P 500, stocks look attractive.
There is more … but more homework is needed before sharing. I am working on it.
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( x) All Links can be opened in a new tab or new window …
- ( xi ) I will be returning and adding more related chart info including links to charts with daily, weekly, and monthly chart analysis
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