Good Times As S&P Shrugs Off Financials

This is an abridged version of our Daily Report.

Good times

Low stress and easy financial conditions have led to high confidence, low savings and good economic surprises.

That combination of positive factors has never been seen to the degree we’re enjoying now. Prior “good times” led to mixed returns, with the last two peaks in stocks triggering after the good times started to ebb.

Shrugging off financials

Financial stocks lost more than 1% on Wednesday, but the S&P 500 closed just off its all-time high. This is odd - usually, when financial stocks take such a big hit, the S&P suffers a larger negative impact, knocking the S&P more than 1% off its 52-week high on average.

When the S&P shrugged it off, it led to consistently poor returns for stocks.

FOMC seasonality

The Dow Industrials Average ETF, DIA, managed to close at a multi-year high on a day the Federal Reserve announced its position on interest rates. Its most consistent performance going forward was over the next 7 days.

Coffee is the most hated commodity

The Optimism Index on the contract has slid below 15, nearing its all-time low. According to the Backtest Engine, of the 59 total days since 1991 when the Optix was below 15, coffee showed a positive return over the next month 75% of the time.

For access to the full report, indicators, charts, screens, and Backtest Engine, log in or sign up for a free 30-day trial today.

The post titled Good Times As S&P Shrugs Off Financials was originally published as on on 2017-12-14.

At, our service is not focused on market timing per se, but rather risk management. That may be a distinction without a difference, but it's how we approach the markets. We study signs that suggest it is time to raise or lower market exposure as a function of risk relative to probable reward. It is all about risk-adjusted expectations given existing evidence. Learn more about our service , research, models and indicators.

Follow us on Twitter for up to the minute analysis of market action.

Not ready to signup up for a free trial yet?

Signup for our Daily Lite email to receive highlights of our daily report, research and studies.

Follow us on Twitter:

Subscribe to our Youtube Channel:

RSS Feed

Subscribe to the Blog RSS feed