Score 8.5 (out of 10): S&P 500 INDEX sets up for +6.1% rally in 3 months

78

What’s Going On Here?

With 8 out of the 10 names in the SP500 index being technology related shares, the index suffered on the back of a large sell off in the Nasdaq. Tech stocks suffered due to a readjustment in the cost of capital (interest rates) as lower interest rates support stronger growth – something that might be reversed, to some extent, when interest rates rise.

Why Now?

S&P 500 INDEX has triggered a new high volatility signal (2 month). During similar occasions, S&P 500 INDEX shares had a median return of +6.1%, over the following 3 months – based on 9 historical occasions with 8 of those showing positive returns (89%). This buy signal for S&P 500 INDEX received a high score of 8.5 (out of 10). This insight was generated on 2022-January-5 with last price of 4700.58.

What’s This Company About?

S&P 500 INDEX is the key benchmark index for US stocks. Based on the last 2 years’ risk/return profile, this asset is seen as Less Risky. Ticker symbol: ES.

What’s My Risk / Reward and Time Horizon?

We found 3 months to be the optimal trade horizon, after testing a number of possible alternatives (accuracy of previous returns). Otherwise consider closing out this trade once the target level of 4986.47 (+6.1%) has been reached. Based on S&P 500 INDEX’s recent up and down swings, LongShortBets suggests considering to set a stop loss level for this insight at 4557.38 (last price at 4700.58), which is equivalent to a -3% decline.

Returns during similar periods:

The chart above shows the previous returns (in %) based on similar setups with the most recent ‘insight’ shown under (1), the second most recent ‘insight’ shown under (2), etc. 

Previous episodes:

10.8% (April-2020), 1.7% (February-2020), 10.7% (January-2019), 6.1% (November-2018), 2.8% (April- 2018), -3.6% (February-2018), 10.2% (August-2015), 3.1% (January-2015), 7% (October-2014).

Historical Chart:

———————————————————————

Summary:

NameS&P 500 INDEX
ViewUp
Star (1 to 10)8.5
Target+6.1%
Time3 months
Hit Rate89%

Popular Insights:

Leave a Reply