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Market Testing Major Support Amid Weak Internals
The Asbury 6, our Tactical risk management model, is a combination of six diverse market metrics that we have combined to look beyond the day-to-day, up-and-down noise of the stock market to determine its actual health — in much the same way as a doctor first checks the patient’s vital signs during an office visit.
We view the “A6” as a lie detector test for the market. It helps us to identify real, sustainable market advances or declines from computer-driven traps for investors — the latter which are often generated by algorithmic (computerized) trading which now accounts for as much as 80% of daily market volume.
The Asbury 6, as shown below, is currently on a February 21st Negative signal all constituent metrics are currently red or bearish. The S&P 500 has declined by as much as 4.7% since then.
It would take four green (bullish) constituent metrics to turn the “A6” back to positive and suggest a new Tactical buying opportunity in the S&P 500. Until then, our risk management model indicates a very internally weak stock market that is vulnerable to a deeper decline.
More About The Asbury 6: The Asbury 6, updated daily in our Research Center, is a combination of six diverse market metrics that were combined to look beyond the day-to-day, up-and-down noise of the stock market to determine its real health — in much the same way as a doctor checks the patient’s vital signs during an office visit. The “A6” helps us to identify real, sustainable market advances or declines from computer-driven traps for investors. Four or more metrics in one direction indicate a Tactical bias. The dates in each cell indicate when each individual constituent turned either positive (green) or negative (red). When all Asbury 6 are positive, market internals are the most conducive to adding equities exposure to portfolios.
The Asbury 6’s current Negative status is particularly important right now because the S&P 500 is testing major underlying support at 3864 to 3762. If this support is broken, it will suggest that the 2022 major downtrend in the US stock market is resuming — and would clear the way for a much deeper decline.
Asbury Research subscribers can get more detail on our latest analysis, and udates to our quantitative models, by logging into the Research Center.
Click the image below to view John Kosar’s March 15th interview by Investors Business Daily.
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Disclaimer: This is provided for information purposes only and is not intended to be a solicitation to buy or sell securities. The performance indicated from back-testing or historical track record may not be typical of future performance. 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 carefully consider whether such trading is suitable for you in light of your financial condition.