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Weekly S&P500 ChartStorm - 7 November 2021

The S&P500 ChartStorm is a selection of 10 charts which I hand pick from around the web and post on Twitter.


The purpose of this post is to add extra color and commentary around the charts.


The charts focus on the S&P500 (US equities); and the various forces and factors that influence the outlook - with the aim of bringing insight and perspective.


Hope you enjoy!


p.s. if you haven’t already, subscribe (free) to receive the ChartStorm direct to your inbox, so you don’t miss out on any charts (you never know which one could change the whole perspective!)

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1. S&P500 Seasonality (Again!): It’s everyone’s favorite chart again. I noted on Twitter that there is still some seasonal updrafts headed into year-end, but I also pointed out how the rally has already been fairly significant. Perhaps even a little overcooked against the typical seasonal trend.

chart of US stockmarket seasonality in 2021

Source: @Callum_Thomas



2. Winning Streaks: But before we go getting bearish, it’s worth highlighting these interesting statistics. Whenever the market has been up 20%+ YTD through to October (like e.g. THIS YEAR), it has *always* had an up month in November (albeit with a n=8). Basically I would say it speaks to the momentum in the market, which despite the September stumble seems pretty much alive and well.

stockmarket table - October 20% and rest of year

Source: @RyanDetrick



3. China Credit Crunch: I remarked the other day on Twitter that when the Evergrande issues initially came to the attention of global markets that folk were perhaps overreacting --- but now I can't help but wonder if folk are underreacting. Particularly in the face of charts like the one below. I still think that push comes to shove, the PBOC steps in and prevents wider contagion within China (and therefore rest of world). But I am paying closer attention than usual to the macro/property/risk backdrop in China, and there are some clear downdrafts in play at the moment.

Source: @SofiaHCBBG



4. Smart Money? So-called smart money hedgers have sharply increased their long positioning in US treasuries (a bet that would pay off if bonds rallied e.g. in response to a growth scare or policy mistake), and short positioning in equities (a position that would pay off if equities fell out of bed). Basically a double-bearish position. Now in fairness this is “hedging“ so it may just be a hedge against a possibility triggered by volatility/momentum-driven market models. But interesting to see such a sharp shift.