Weekly S&P500 ChartStorm - 21 November 2021

Weekly S&P500 ChartStorm - 21 November 2021

The S&P500 ChartStorm is a selection of 10 charts which I hand pick from around the web and post on Twitter.

The purpose of this post is to add extra color and commentary around the charts.

The charts focus on the S&P500 (US equities); and the various forces and factors that influence the outlook - with the aim of bringing insight and perspective.

Hope you enjoy!

p.s. if you haven’t already, subscribe (free) to receive the ChartStorm direct to your inbox, so you don’t miss out on any charts (you never know which one could change the whole perspective!)

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1. S&P 500 Seasonality Chart: It’s everyone’s favorite chart updated again (maybe for the last time this year?). The S&P500 has been sticking to the seasonality script through most of this year… makes me think about Murphy’s Law tho - maybe the market will start to improvise and go off-script? Either way, the next few weeks seasonally look like sideways action.

Weekly S&P500 ChartStorm - 21 November 2021 - 1

Source: @topdowncharts

2. Volatility Seasonality: A twist on the previous chart — same concept, but this time with implied volatility. I find it interesting to note that the VIX has actually been a bit lower than usual for this time of the year (and trending up short-term…). One last VIX spike before year-end?

Weekly S&P500 ChartStorm - 21 November 2021 - 2

Source: @topdowncharts

3. Stockmarket Statistics: What happens after the market goes up a “crazy overheated” 20%+ over the course of a year?

More Gains.

Historically most of the time if the market closed up 20%+ for the year, the next year was also positive (84% of the time). As of writing, the market is up some 27% YTD (albeit, this year ain't over yet!).

Weekly S&P500 ChartStorm - 21 November 2021 - 3

Source: @RyanDetrick

4. Bad Breadth? Fully 1/3rd of stocks are in a downtrend.

(defined as trading below their respective 200dma)

Will this bearish divergence be a problem?

Weekly S&P500 ChartStorm - 21 November 2021 - 4

Source: Index Indicators

5. GAARP vs GAAAP: On this metric, growth stocks are the most expensive ever vs value stocks. So it begs the question… Growth at a reasonable price? or Growth at *any* price?

(but then again, who defines what "reasonable" is in a market like this!)

Weekly S&P500 ChartStorm - 21 November 2021 - 5

Source: @TheOneDave

6. Low Energy: Energy stocks are attempting to turn the corner vs the rest of the market, but face high hurdles from the raging tech bull market, rise of ESG investing and regulatory/political hurdles, not to mention commodity market volatility.

What comes down must go up? (or something else?)

Weekly S&P500 ChartStorm - 21 November 2021 - 6

Source: @dissectmarkets

7. Buybacks Back: New all-time high for buybacks in Q3 (with 95% reported). Always makes me wonder these trends — you see the majority of buybacks occurring near market peaks… i.e. when valuations are extreme expensive. The opposite of value investing: buy more when its expensive, buy less when it’s cheap — seems like upside-down logic to me, but then again I am a simple man.

Weekly S&P500 ChartStorm - 21 November 2021 - 7

Source: @hsilverb

8. Payout Ratio: As an interesting follow-on to the ATH in buybacks/dividends, it’s interesting to note that the dividend payout ratio is actually below average...

Scope to return more cash to investors?

Weekly S&P500 ChartStorm - 21 November 2021 - 8

Source: @ChrisDagnes

9. Buffett Indicator: Looks like this indicator has reached a permanently higher plateau! (kidding of course - echoing the famous last words of Irving Fisher back in 1929) Interesting stat to note: to make this indicator as cheap as where it got to during the financial crisis lows the market would need to fall over 70%. Definitely not a prediction, but interesting nonetheless. I would say I have multiple quibbles with this indicator, I think CAPE and ERP are better valuation metrics, but that’s a topic for another day.

Weekly S&P500 ChartStorm - 21 November 2021 - 9

Source: @KailashConcepts

10. Buffett the Compounder: Speaking of Buffett, a lesson in compounding.

Weekly S&P500 ChartStorm - 21 November 2021 - 10

Source: @DividendGrowth

Thanks for following, I appreciate your interest!

!! BONUS CHART: total stockmarket leverage

>> Click through to the ChartStorm Substack to see the bonus chart section

https://chartstorm.substack.com/p/weekly-s-and-p500-chartstorm-21-november

 

 

 
 
 
 
 

 

 

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Callum Thomas

Callum Thomas

Head of Research

Callum is the founder and managing shareholder of Topdown Charts. His career background is in multi-asset investment management in New Zealand and Australia, with a focus on investment strategy and economics.  

Callum has a passion for global economics and asset allocation strategy and has developed strong research and analytical expertise across economies and asset classes.  Callum's approach is to deploy a blend of factors to build out a holistic picture and raise conviction. This includes valuations, monetary conditions, cyclical indicators, sentiment, and technicals.  Callum believes innovation is vital to maintaining an edge through investment research and is on a constant mission to uncover and develop new datasets, indicators, and new ways of looking at the world to drive sensible and profitable decision making by portfolio managers.

LinkedIn: https://www.linkedin.com/in/callum-thomas-4990063/

Twitter: https://twitter.com/Callum_Thomas