Weekly S&P500 ChartStorm - 1 May 2022
The Weekly S&P500 ChartStorm is a selection of 10 charts which I hand pick from around the web and post on Twitter. The purpose of this post is to add extra color and commentary around the charts.
The charts focus on the S&P500 (US equities); and the various forces and factors that influence the outlook - with the aim of bringing insight and perspective...
1. Happy(?) New Month! Another month, another update to the monthly chart, now tracking clean an clear below its 10-month moving average.
2. Monthly Asset Returns: US Large Cap equities were at the bottom of the table in April… basically everything except cash & commodities was in the crapper this month.
![](https://assets.livewiremarkets.com/rails/active_storage/blobs/proxy/eyJfcmFpbHMiOnsibWVzc2FnZSI6IkJBaHBBeTZyQVE9PSIsImV4cCI6bnVsbCwicHVyIjoiYmxvYl9pZCJ9fQ==--6aa0a626b054fb8f99b618f7be948c0c1c023f8d/2.png)
3. S&P500 Real Returns: CPI-Adjusted S&P500 on track for its worst performance since 1974 (and if you wanted a macro analog, the 70's have some similarities... e.g. surging inflation, geopolitical shocks, surging rates).
![](https://assets.livewiremarkets.com/rails/active_storage/blobs/proxy/eyJfcmFpbHMiOnsibWVzc2FnZSI6IkJBaHBBenVyQVE9PSIsImV4cCI6bnVsbCwicHVyIjoiYmxvYl9pZCJ9fQ==--67426ef0bb5869baa4792b8355883a69f1c53af7/3.jpeg)
4. Rare Returns: As highlighted in chart 2, both stocks and bonds have had a rough and tough time this year. It was always going to be a hard ask for bonds to be a diversifier to stocks when both were extreme expensive -- all was needed was an inflation shock.
![](https://assets.livewiremarkets.com/rails/active_storage/blobs/proxy/eyJfcmFpbHMiOnsibWVzc2FnZSI6IkJBaHBBME9yQVE9PSIsImV4cCI6bnVsbCwicHVyIjoiYmxvYl9pZCJ9fQ==--8d614a179e6248895568b81d1013674ef0373358/4.jpeg)
5. Bad Breadth Update: An update to that 50dma breadth chart from last week: starting to look a little more oversold this week... but I would probably still just call it strong bearish momentum as the index has also taken out a pretty key level.
![](https://assets.livewiremarkets.com/rails/active_storage/blobs/proxy/eyJfcmFpbHMiOnsibWVzc2FnZSI6IkJBaHBBMTZyQVE9PSIsImV4cCI6bnVsbCwicHVyIjoiYmxvYl9pZCJ9fQ==--b3f4f480d7253702f49983c34aa00945b33fdd33/5.png)
6. Correction-Drivers Update:
-EPOL [Poland ETF] (geopolitics proxy): worsening, high risk of spillovers.
-LQD [IG Credit ETF] (credit/rates): new lows as bond yields spike further + credit risk sentiment is starting to stumble too as the macro outlook dims.
-ARKK [New Tech Fund] (tech burst): new lows as tech reset plays through.
And the index has made an initial break down. Not good.
![](https://assets.livewiremarkets.com/rails/active_storage/blobs/proxy/eyJfcmFpbHMiOnsibWVzc2FnZSI6IkJBaHBBMm1yQVE9PSIsImV4cCI6bnVsbCwicHVyIjoiYmxvYl9pZCJ9fQ==--489ebe4fd0d2cd4ce723c4a5fcb5507faae82017/6.png)
7. "SELL IN MAY" (especially May of Mid-Term years)
(of course: past performance - while informative and interesting context - is no guarantee of future results)
![](https://assets.livewiremarkets.com/rails/active_storage/blobs/proxy/eyJfcmFpbHMiOnsibWVzc2FnZSI6IkJBaHBBM1NyQVE9PSIsImV4cCI6bnVsbCwicHVyIjoiYmxvYl9pZCJ9fQ==--8309c79e7a0f8901512a661604ab6ae15ed692f9/7.jpeg)
8. Let There be no Ambiguity: This is a bear market.
Under the surface the picture is clear as demonstrated in this excellent chart. We are only now starting to see the index roll over in earnest.
![](https://assets.livewiremarkets.com/rails/active_storage/blobs/proxy/eyJfcmFpbHMiOnsibWVzc2FnZSI6IkJBaHBBMzZyQVE9PSIsImV4cCI6bnVsbCwicHVyIjoiYmxvYl9pZCJ9fQ==--95064971d11650aa2eae96dccd68dd5b7143363e/8.png)
9. History Rhymes: Without even delving into the specifics of this chart the thing that is crystal clear is how many parallels there are NOW versus BOTH 2000 (tech boom/bust) AND 1970's (inflation/geopolitical shocks).
![](https://assets.livewiremarkets.com/rails/active_storage/blobs/proxy/eyJfcmFpbHMiOnsibWVzc2FnZSI6IkJBaHBBNG1yQVE9PSIsImV4cCI6bnVsbCwicHVyIjoiYmxvYl9pZCJ9fQ==--10224cabe57bee16e47529185580ffb2e9073a2d/9.png)
10. Valuations: I know not everyone likes the Price-to-Book ratio, and fewer still like comparing valuations across time, and people will offer plenty of explanations/reasons for why it’s so high...
But sh*t still expensive.
![](https://assets.livewiremarkets.com/rails/active_storage/blobs/proxy/eyJfcmFpbHMiOnsibWVzc2FnZSI6IkJBaHBBNmFyQVE9PSIsImV4cCI6bnVsbCwicHVyIjoiYmxvYl9pZCJ9fQ==--badbb14af1c50d31347f0e6849a2533e1a9d38d9/10.png)
Thanks for reading!
Callum Thomas
Founder and Head of Research at Topdown Charts
Any feedback, questions and views are welcome in the comment section below.
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