US Stock Market: Price Trends, Market Internals Remain Weak
At the time of our previous November 8th Update, the benchmark S&P 500 (SPX) was in the midst of a corrective rebound following a sharp 11% decline between October 3rd and October 29th — a decline that we were fortunate enough to anticipate and, for the most part, avoid.
In that update we pointed out that the daily total net assets invested in the SPDR S&P 500 Trust ETF (SPY, which tracks the S&P 500) had just moved back above their 21-day (monthly, our tactical time frame) moving average to indicate an emerging trend of monthly expansion, similar to that which fueled the previous broad market rally from mid September to early October.
Editor’s Note: The total net assets invested in SPY are one of our “Asbury 6” key market internals. We update the Asbury 6 every day and make them available to Asbury Research subscribers.
The chart below, an updated version of the one from our November 8th Update, shows that these assets have since declined back below their 21-day moving average as of November 19th, indicating a new trend of monthly contraction and a Negative reading.
In addition, the other five market metrics that comprise the Asbury 6 are also currently in negative territory, collectively indicating a risk off mode.
If and when these metrics move back to a positive (risk on) status, we will once again advocate a more aggressive stance in both our investment research (Asbury Research) and portfolio allocations (Asbury Investment Management). Until then, however, we remain in a defensive, capital preservation mode.
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