Will Markets Add More Risk As We Approach Year-End?
Candy Matheson | Dec 21, 2014 12:18AM ET
As you can see from a comparison of the following two percentage gained/lost graphs of the 9 Major Sectors (plus the SPX), (the timeframe on the first graph is year-to-date, and on the second is this past week), market participants ventured into the "riskier" sectors to add more risk this past week.
The second graph shows that Energy (via SPDR Energy Select Sector Fund (ARCA:XLE)) and Materials (via SPDR Materials Select Sector (ARCA:XLB)) contributed substantially to the lift in equities this past week. Look for that trend to either continue, or reverse, if commodity prices begin to plunge again.
We'll see if this very recent rally continues to the end of the month/quarter/year...and, whether the SPX will reach its next resistance level of 2150, as mentioned in my posts of December 4, and, more recently, December 14th, if not by Christmas Day, then, perhaps, by the end of this year.
In this regard, the following two Daily charts provide updates on Friday's closing level of the SPX and the SPX:VIX ratio. Current price levels on both charts are back above near-term resistance levels of 2000 for the SPX and 120.00 for SPX:VIX. Failure to hold these levels could send prices tumbling to re-test their prior swings lows, or lower. The Momentum indicator is still below zero for both charts, so we'll need to see these rally and hold above zero to confirm any further sustainable buying in equities.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.