S&P 500: Must Rally Now Or Begin A Correction
Asbury Research’s Stock Market Update & Asbury Investment Management Video is a free report that we use to keep in contact with existing clients, and those who have previously asked for information about either Asbury Research or Asbury Investment Management (AIM). Feel free to contact us for additional information about our services for both professional and private investors.
In our previous March 7th Stock Market Update & Asbury Investment Management Video, entitled US Market Vulnerable To A Much Deeper Decline, we said that the benchmark S&P 500 was “holding onto Tactical support by its fingernails” but that 60 years of seasonality data, and our Tactical models, warned of a much deeper decline.
Editor’s Note: At Asbury Research, the Strategic trend (63 days or one quarter) is the one we are trying to capture. The Tactical trend (21 days or one month) is the one we utilize to profitably move into and out of the Strategic trend.
The red highlights in the chart below, an updated version of the one from our March 7th report, show that Tactical underlying support is currently situated 1% just below the market at SPX 3880 to 3862 and represents the March 2020 uptrend (dashed purple) line and the 50-day moving average (solid blue line). The red highlights show that this is the third time this critical support area has been tested in just the past month. The index’s inability to sustain a rally from it is indicative of a weakening and vulnerable market.
It would take a sustained rebound back above SPX 3950 next week, accompanied by a shift back to Risk On in our Correction Protection Model (CPM), to indicate the US broad market index’s November 2020 advance has resumed. Conversely, a decline below 3880-3862 support area next week, on a continued Risk Off status by CPM, would indicate that an overdue market correction has begun — and would clear the way for a much deeper decline.
Our latest video below shows how we have navigated these recent market conditions for client portfolios in real-time.
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