S&P 500’s price is currently trading under its 10-month moving average.
Here’s the chart:
Let's break down what the chart shows:
The black line is the S&P 500 index price.
The red line is the 10-month moving average of the S&P 500 index price.
The gray lines highlight when the price is above the 10-month moving average.
The Takeaway: With just six trading days left in the month, there's one model I'm paying close attention to. The bulls need to work hard to push the S&P 500 price back above its 10-month moving average. At the moment, the S&P 500 is 1.7% below this moving average. If the price stays below it, this could create challenges for stocks.
I have done the math… Take a look at the table on the chart.
If you've been following me for some time, you know that I like to know what type of market environment we’re in. One of the simplest strategies I use for assessing the longer-term environment is: If the market is above the 10-month moving average, I’m long. If the close is below that moving average, I stay mostly in cash.
I do not recommend relying solely on one signal or indicator. However, this approach requires minimal effort and tends to provide slightly better returns than a buy-and-hold strategy while helping to avoid the drawdowns that a buy-and-hold investor might face.
Do you think the bulls will step up and push the price back above the 10-month moving average?
Do you use any tools to identify what the market environment is?
Grant Hawkridge | Chief Aussie Operator, All Star Charts
PSS: Which insiders are getting it right? Steve and Alfonso will break down who’s buying, what they know, and whether they actually made a smart move. Plus, Steve reveals the one trade he’s taking himself. Watch LIVE here.
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