Here’s the rundown of our latest monthly scoring of our PWA Equity Market Conditions Index (EMCI).
In a word, Oof!!
09/01//2022 PWA EQUITY MARKET CONDITIONS INDEX (EMCI): -50 (from 0 on 7/27/2022)
SP500 past 30 days -5.77%:
Our EMCI’s decline to -50, from 0 to end July, is substantial; reflecting notable deterioration in general equity market conditions over the past few weeks.
Inputs that showed improvement:
None
Inputs that deteriorated:
Interest Rates (from neutral to negative)
Sector Leadership (from positive to neutral)
SPX Technical Trend (from neutral to negative)
Breadth (from positive to negative)
Inputs that remained bullish:
US Dollar
Sentiment (bearish/high fear… i.e., contrarian indicator)
Inputs that remained bearish:
Fed Policy
Valuation
Economic Conditions
Geopolitics
Credit Market Conditions
Areas that remained neutral:
Fiscal Policy
EMCI since inception:
SP500 since EMCI inception:
The one input that I suspect the more tutored reader might object to (in terms of how we score it) would be the dollar. I.e., it’s been an utter wrecking ball this year (rising) and, go figure, we currently score it a positive.
US DOLLAR: +1 (n/c)
Bearish macd/rsi divergences remain as price is presently breaking out to new highs:
Asian equities leaned red overnight, with 10 of the 16 markets we track closing lower.
Europe’s in rally mode so far this morning, with all of the 19 bourses we follow trading up as I type.
US stocks are clinging to those pre-market gains to start today’s cash session: Dow up 143 points (0.46%), SP500 up 0.64%, SP500 Equal Weight up 0.67%, Nasdaq 100 up 0.51%, Nasdaq Comp up 0.60%, Russell 2000 up 0.14%
The VIX sits at 24.02, down 6.03%.
Oil futures are up 2.49%, gold’s up 0.67%, silver’s up 0.59%, copper futures are down 0.04% and the ag complex (DBA) is up 0.57%.
The 10-year treasury is up (yield down) and the dollar is down 0.38%.
Among our 35 core positions (excluding options hedges, cash and short-term bond ETF), only 28 — led by energy stocks, uranium miners, Sweden equities, metals miners and Eurozone equities — are in the green so far this morning. The losers are being led lower by base metals futures, Dutch Bros, AMD, Disney and emerging market equities.
“The Anglo American CEO said we will need about 17 million metric tons of additional copper for the energy transition into EV and other sectors. That’s like 60 more of their new Quelleveco copper mines, “nobody has started any of those 20 year projects.””
Have a great day!
Marty