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Market volatility is back, baby!

S&P 500 Index, 7 May 2019
S&P 500 index with 13 and 48-day EMA, 28-day Momentum and 14-day Average True Range

I'm actually down in Silicon Valley today, where it's about 10-degrees cooler than it is in Portland! Don't tell the Californians, or even more of them will be moving to Portland and drinking our beer. It may be a cool in Silicon Valley, but the stock market is hot, hot, hot! We got a little taste of the volatility last Wednesday, when the S&P 500 sold off 0.75%, which it tried to regain on Friday. But this week it's all about testing that 50-day moving average (48 on my chart - see Golden Cross - Which is the best?).

The market got a pretty good bounce off of the 50-day moving average, but still closed down 1.65% - the largest single-day decline in 45 days. Still, all of today's action did not trigger a short trade. The S&P 500 has been putting in a monster 90-day negative divergence on the 28-day momentum indicator, just like it did before the selloff late last year. Momentum closed at 78.7 which is still above the 68.8 trigger. Tomorrow? Probably not. But this week? I think so.

Volatility, as measured by the 14-day Average True Range (VIX is all the rage, but often the simpler solution is the more actionable one) bottomed at 19.8 on April 29th - the only day it has been below 20 since just before last year's selloff. It's already been an exciting week, and we're only two days into it! It's way too early to tell if this is the "last hurrah" before the market resumes its march to new all-time highs, but a nice hard selloff would sure make for an exciting end to 2019.

-- Scrib