Taking a Look at the “Death Cross” in an S&P 500 Averages Chart
March 15, 2022
Welcome to Wealth Enhancement & Preservation’s Market Minute, where we get to update you on everything that happened in the financial markets this past week. My name is Armand Glassman, and I am a partner at Wealth E&P and work as the Chief Portfolio Manager and a Certified Financial Planner™.
Last week, all three of the major indices, the Dow Jones industrial average, the S&P 500, and the NASDAQ 100, closed down anywhere from 2% to 4%. Equity trading continues to be volatile with high trading volume and significant price swings. As a result, volatility (as measured by the volatility index) remains high. It is greater than 30 in fact, and 20 or below indicates calmer market activity.
The chart below shows high, low, and closed positions for the S&P 500 index for the past year. It also shows the 50 and 200-day simple moving averages for closing price levels in the index.
As you can see, the blue line representing the 50-day moving average is trending negative, and it touches the red line representing the 200-day moving average. This represents a significant downturn in the momentum of the S&P 500 index, and it implies negative action in the index.
Additionally, our All-Weather signal continues to suggest caution, moving to moderate last month and to moderate-conservative this month. We've adjusted our tactical strategies accordingly, selling risk assets with high market exposure and buying risk-averse assets (including cash).
If you have any other questions for us about your portfolio or financial situation, if you want a risk profile, or if you would like a retirement projection, please feel free to reach out or visit www.wealthep.com. Otherwise, stay tuned for our Market Minute next week!
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