Conclusions, investment impacts, strategies
Benchmark S & P 500 (SPX) will launch this week at 4424, less than 1% above key tactical support amid internal market weakening by Asbury 6 (internal risk management model). If the current November 2020 SPX tactical uptrend remains healthy and effective, it should soon resume from this region as Asbury 6 is strengthened. However, next week’s further weakness of the A6 will be accompanied by a persistent decline below SPX4424. Indicates that a long-term decline in corrective action is underway.
Weekly Summary / Overview
benchmark S & P 500 (SPX) Friday’s session ended at 4459, dropping 77 points (1.7%) in a week.The widespread market index of the United States Currently, it has increased by 18.7% in 2021. It is 103.2% above the March 2020 lows.
Chart 1 SPX fell below the October 2020 trendline on Friday, but is still above it Primary tactical support On a 50-day moving average. This support is currently 0.8% below the market at 4424.. NS important (On a closing basis, just a few index points or more) And Sustain A fall below 4424 (more than a day or two) is needed to show that the tactical trend has turned negative and is the way to a potential test of the next support level at 4373, which is 1.9% below the market. To open up.
Key strategic support is in 4082-4057, 8.5% -9.0% below the market. It represents a 200-day moving average (a major trend proxy) and benchmark lows on March 13th and 19th.
Asbury 6: Positive as of July 20
table 1 By September 10th Asbury 6 The constituent index is positive (green). “A6” model It has been in a positive state since July 20th.. Since then, the S & P 500 has risen by 5.2%.
How to Interpret Asbury 6: Four or more metrics in one direction (positive (green) or negative (red)) indicate tactical bias. The date in each cell indicates when the individual components of A6 turned positive (green) or negative (red). If all Asbury 6s are positive, the inside of the market is most helpful in adding risk to the portfolio. Each negative reading adds an additional element of risk to your participation in current or new investment ideas. Learn more about Asbury 6 here..
If Asbury 6 is as balanced as it is now, it is The internal state of the stock market is beginning to weaken — But it’s still not enough to show a new change in direction. This means that if the current tactical uptrend is still valid and intact, it will probably need to resume immediately from its current level this week. However, if the A6 continues to weaken, it is likely that key tactical support will fail. The current situation in Asbury 6 begins to think about where investors can look at their holdings and eliminate risk if the model continues to weaken and the key tactical support shown in Chart 1 above is breached. It suggests that it is a good time.
The rate of change also indicates the decision point
Chart 2 plot S & P500 every day In the panel above it since January 21st (Monthly, tactical period) Rate of change, Or MROC, Bottom panel.
This chart is another indicator that the broad US market index is at a tactical decision point. MROC ended just above the zero line last week. The green highlight between both panels shows that the previous instance closely matched the four tactical bottoms. SPX from the beginning of the year.
If the current 2021 tactical uptrend of the S & P 500 is still healthy and intact, then in the next week or so, 1) MROC should rise above the zero line and 2) Asbury 6 will be strengthened (more green). 3) Tactical support on the SPX4424 should not be broken in a meaningful way.
However, if these conditions are not met, it indicates that a long-term broad US market revision is underway. And given that the S & P 500 has already risen 108% from the March 2020 Covid low, the next fix could be a widow maker.
Sign up for Asbury Research’s free biweekly stock market update click here.. For more information on our investment management approach, click here..