What's Stalling Momentum In The S&P 500?

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Posted: Feb 22, 2021 11:35 AM
What's Stalling Momentum In The S&P 500?

Source: AP Photo/Richard Drew

The S&P 500's upward momentum stalled out in the MLK holiday shorted trading week. The index closed the week at 3,906.71, down 0.7% from the previous week's record high closing value.

The week however provided the clarity we needed to fix the starting point for the redzone forecast range shown on the latest update to the alternative futures chart. Investors were focusing on 2021-Q2 as the S&P 500 caught up to the echo of past volatility from last year's coronavirus recession crash.

Although its not shown on the chart, we've tied the opposite end of the redzone forecast range to the dividend futures-based model's projection of the trajectory associated with investor expectations for the distant future quarter of 2021-Q4, on the opposite side of the volatility echo, which extends to 10 May 2021. In doing this, we're assuming investors will have shifted their forward-looking attention outward by that point of time, which is an assumption we may need to revisit.

There wasn't much in the way of market moving headlines in the news of the week that was, but what there was indicates investors are focusing on 2021-Q2 at the present time.

Tuesday, 16 February 2021
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Thursday, 18 February 2021
Friday, 19 February 2021

Elsewhere, Barry Ritholtz names the positives and negatives he found in the past week's economics and markets news.