Score 9.9 (out of 10): SPDR S&P 500 ETF TRUST sets up for +3.3% rally in 1 month

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What’s Going On Here?

Since the beginning of the year, equity markets have been driven by the expectations that the FOMC will raise rates twice in Q1 – previously expectations were for just one rate hike. In addition, Fed Chair Powell has indicated that the FOMC sees also the balance sheet as too large. Both rate hikes and a smaller balance sheet indicate tightening of liquidity. The question for investors is: has the market now priced in too much tightening?

Why Now?

SPDR S&P 500 ETF TRUST has triggered a new high volatility signal (3 month). During similar occasions, SPDR S&P 500 ETF TRUST shares had a median return of +5.3%, over the following 3 months – based on 10 historical occasions with 10 of those showing positive returns (100%). This buy signal for SPDR S&P 500 ETF TRUST received a high score of 9.5 (out of 10). This insight was generated on 2022-January-21 with last price of 0.

What’s This Company About?

SPDR S&P 500 ETF TRUST is in the Growth&Income-Large Cap business. Based on the last 2 years’ risk/return profile, this asset is seen as Less Risky. Ticker symbol: SPY US.

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 461.02 (+5.3%) has been reached. Based on SPDR S&P 500 ETF TRUST’s recent up and down swings, LongShortBets suggests considering to set a stop loss level for this insight at 435.48 (last price at 437.98), which is equivalent to a -0.6% 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:

5% (May- 2020), 4.8% (March-2020), 5% (December-2018), 5.5% (April-2018), 3.9% (February-2018), 7.3% (October-2015), 9.3% (August-2015), 5.7% (February-2015), 3.9% (December-2014), 15.4% (October- 2014).

Historical Chart:

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Summary:

NameSPDR S&P 500 ETF TRUST
ViewUp
Star (1 to 10)9.9
Target+3.3%
Time1 month
Hit Rate100%

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