TradingEdge Weekly for Mar 20 - S&P 500 base breakdown, credit default risk, sector breadth extremes, commodity seasonality
Key points:
- S&P 500 completes base breakdown pattern with 72% win rate when above 200-day MA
- Credit default swap prices spike to 9-month high, particularly concerning for Energy sector
- Consumer Discretionary sector sees 50% of stocks in bear market-historically bullish setup
- High-yield bonds, Healthcare and Industrial insiders flash favorable accumulation signals
- NYSE breadth negative for 7 straight sessions, suggesting near-term sluggishness
- Commodity seasonality: Corn, Natural Gas, Soybeans entering favorable periods; Palladium, Sugar, Wheat unfavorable
House view:
- Stocks:
- Short-term: Bearish. Currently, nearly all indicators are unfavorable, as detailed in the "Where we're at" section. U.S. equities suffer a historic technical breakdown, with the S&P 500, Dow Jones, and Nasdaq all breaching their 200-day moving averages in a rare "Triple Breach" event. Algorithmic trading triggers cascading stop-losses after the critical long-term bull/bear line is broken, with RSI and MACD confirming full bearish momentum. This time frame covers 1-4 weeks.
- Intermediate-term: Bearish. Ma

