This year’s divergence between the S&P500 Consumer Discretionary Index and the main S&P500 index is a bearish signal for stocks, according to Riccardo Ronco at Aviate Global. Such a divergence also took place in 2000 and 2007 and suggests the main index is anticipating a decline in consumer activity.
The S&P500 is set to climb higher despite the recent correction, according to Ari Wald at Oppenheimer. The low level of the VIX should also mean that this correction is more muted than previous corrections both in terms of magnitude and duration.
Ron William, principal market strategist at RW Market Advisory, appearing on IG Index TV discusses how the US equities market remains in bubble territory and how August to October will be a key timing window should the market exhaust.
The long-term uptrend of the FTSE future remains intact, gaining further strength after this month’s rally off support at 6669.5, writes Andy Dodd at Louis Capital Markets. However, strong resistance remains in place at 6861.5, a significant barrier to gains beyond this level.
The current low level of the VIX suggests that stocks are not at a top as is being widely claimed, says Ari Wald at Oppenheimer. Previous declines in the VIX below 15 have usually been followed by periods of above average performance in the S&P500.
The chart of the current IPO market resembles a pre-dotcom crash scenario for stocks, says Edward Loef at Loef Technical Analysis. When compared with Nasdaq chart of 1999, if history is to repeat itself then this would be a powerful warning signal for stocks.
Indian stocks continue to climb despite rising oil prices thereby continuing a 25 year trend, says Tarun Dang at Trendwise Capital Management. A positive price correlation between Brent crude and the CNX Nifty appears to contradict the view that higher oil prices are negative for stocks.
Peter Lee at UBS presents individual technical analysis of the current most interesting US stocks. Included is bullish medium-term outlooks for Apple and Boeing, while Google continues to enjoy support after this year’s early dip.
Divergence between the S&P500 and the retail sector within it is a red flag that the market may be nearing a top, says Riccardo Ronco at Aviate Global. Although the trend in the overall market remains bullish for the present, the 52-week % spread of retail/S&P has fallen sharply since the start of the year.
An increase in NYSE margin debt, as the US stock market continues to rally, could be at a turning point suggesting a possible top in stocks, says Max Knudsen at ADS Securities.