US Stock Market: Survives A Test Of Underlying Support Amid Improving Internals

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In our December 4th Stock Market Update & Asbury Investment Management Video, we pointed out that 2 of our Asbury 6 key market metrics had turned Negative (bearish) while the benchmark S&P 500 (SPX) was testing minor underlying support at 3077.

Editor’s Note: The Asbury 6 is a tactical model that consists of six key market indicators, of which only one – by design — is based on price.  We use the “A6” as a lie detector test for the market that helps us identify real, sustainable market advances or declines from computer-driven market noise that often become traps for real investors.

When the Asbury 6 starts to weaken as it did in early December, we use it as a means to identify a tactical inflection point.  We then watch closely for either:

  • the A6 to continue weakening (4 or more Negative constituents indicate a bearish tactical signal) as SPX breaks down below underlying support to indicate a correction is beginning, or
  • for the A6 to quickly recover as underlying support holds, indicating the bullish trend is resuming.

In this case it was the latter, as Chart 1 below shows that SPX 3077 was tested and held on December 3rd.

Chart 1

Meanwhile, Table 1 below — updated through yesterday’s close — shows that that the high yield corporate bond spread and market breadth components of the Asbury 6 quickly turned back to a positive status on Dec 4th and 5th, respectively, as the US broad market index resumed the uptrend.

Table 1

This combination of in-house tactical models and their relationship with key areas on a price chart is one way that we keep our subscribers and clients out of trouble, and with the trend.

Best Wishes for a safe and happy Holiday Season!


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This communication is for informational purposes only. It is not intended as investment advice, or as an offer or solicitation for the purchase or sale of any financial asset.  No inferences may be made and no guarantees of profitability are being stated by Asbury Research LLC.  The risk of loss trading in financial assets can be substantial. Therefore, you should therefore carefully consider whether such trading is suitable for you in light of your financial condition.

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