Stock Market Strong Start to Jackson Hole Week

By: PhilStockWorld

The S&P 500 rallied at the open and drifted higher to its 0.87% intraday high during the lunch hour. It then traded in a narrow range to its 0.85% close. The popular press attributes the gain to reduced tensions in Ukraine. It also comes in advance of potential Fed signals in Wednesday’s release of the FOMC minutes for their July meeting and more significantly, from the Fed’s Jackson Hole summit that starts on Thursday. The index is up 6.67% year-to-date and only 0.82% off its record close.

Treasury yields again headed lower. The yield on the 10-year Note closed at 2.39%, up 5 bps from Friday’s close.

Here is a 15-minute chart of the past five sessions.

Here’s a daily chart of the SPY ETF. As a gauge of investor sentiment, trading volume has been quite volatile. Last Thursday it was a ghostly 36% below its 50-day moving average. Friday’s decline saw volume surge to 57% above the MA, and today’s 0.84% price gain in the ETF was on a volume slump to 23% below the MA.

A Perspective on Drawdowns

The chart below incorporates a percent-off-high calculation to illustrate the drawdowns greater than 5% since the trough in 2009.

For a longer-term perspective, here is a pair of charts based on daily closes starting with the all-time high prior to the Great Recession.

- Phil

www.philstockworld.com

Philip R. Davis is a founder of Phil's Stock World (www.philstockworld.com), a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders. Mr. Davis is a serial entrepreneur, having founded software company Accu-Title, a real estate title insurance software solution, and is also the President of the Delphi Consulting Corp., an M&A consulting firm that helps large and small companies obtain funding and close deals. He was also the founder of Accu-Search, a property data corporation that was sold to DataTrace in 2004 and Personality Plus, a precursor to eHarmony.com. Phil was a former editor of a UMass/Amherst humor magazine and it shows in his writing -- which is filled with colorful commentary along with very specific ideas on stock option purchases (Phil rarely holds actual stocks). Visit: Phil's Stock World (www.philstockworld.com)

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