TradingEdge Weekly for May 29 - RSP recovery signals, European breadth thrust, PE/VIX spread, energy and corn seasonality
Key points:
- RSP recovered from an 8% drawdown in ~42 trading days; 6 prior signals all showed RSP higher 6 months later (avg +9%)
- PE/VIX spread crossed back above 5.5 after a 63-day absence; 21 signals show SPX higher a year later 81% of the time, but VIX tends to spike alongside the rally
- European breadth surged from below 25% to over 75% in under a month; historically a potent bullish signal for the S&P 500
- Energy (XLE, OIH, XOP) enters a historically weak period mid-June through September (XLE cumulative -73% in this window)
- Corn futures enter seasonal bearish window (May 21 - Aug 14); 22% win rate since 1981, but exceptions like 2012 gained over $7K
House view:

