Index Overview
$SPY $DIA $QQQ $IWM
The calendar is doing what it does as far as the indices go - this is seasonally the worst stretch of the year. The SPY 0.00%↑ sell-off accelerated last week, but what does it mean?
We remain above the AVWAP of the January ‘22 market highs. This position leaves the desirability to be overly constructive on equities as limited, at best. I’m watching to see if the market defends that level.
But maybe we don’t get there -
Last time the SPY 0.00%↑ broke through the 200 day was February. Though the recent occurrences were not in an upward sloping 200 day, which is what we have today. If the 200 day breaks here, my expectation is a retest of the AVWAP peak (about a 10 point differential between those levels currently). The movement around these key points will provide much needed information on whether we’re in for a period of sideways chop, or if something worse is at play.
I’m using the same levels in the DIA 0.00%↑ here. We can see that last weeks action already broke level 1. If the industrials average doesn’t bounce here, it would seem likely that a revisit to the AVWAP (purple line) is in the cards.
The QQQ 0.00%↑ might have the most pain yet to come. Same points of interest apply here.
Finally, small caps…
The IWM 0.00%↑ topped out first, and has lagged lower in the nearly 2 years since. This trend has made owning this index virtually impossible.
