Here is an update of my current view and some data I enjoy reviewing regularly.
Key mayor index components reported last week. The SP500 had 5 negative consecutive weeks in a row. It closed the month at -8.8% and the year so far it is at -13.3%
Tuesday: #GOOG #MSFT
Thursday: #AAPL #AMZN
Last Tuesday the SPX was -11.5% YTD before those earnings. On the positive side, I was expecting that the companies above will provide guidance to support the Indexes.
The data as of the last trading day of April suggests that most traders/managers in the traditional Equity and Bonds universe are not enjoying opportunities to provide positive returns. This is negative because for the last decade traders did not gain the experience to be in a sustained range or bear market.
The chart below can provide some guidance on the up-days strength vs the down days. It is relevant to note that BEAR MARKETS rallies can be much stronger than the negative days. We can estimate the future with certainty however, this data provides me with enough info to note the regime has changed (Q2 and Q2 of 2021 vs 2022). Regarding the seasonality of the SPX the northern hemisphere summer is not usually the best time to have agresive long exposure to equities. Of course, I can not know if this year will be an outliyer.
Regarding the SP500 Yearly data below.
We have experienced two negative quarters in a row negative and April closed at the low which to my research can lead to “not be best” outcome for bulls. The P/E was adjusted on the free scale on daily data. The value of 4000 can be considered as support – but for me, that could turn out to be just a number – if there is no an event to change this.
It is always good to review the risk-reward equation of the portfolios and adjust to your expectations.