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Market Analysis For Week of September 20, 2021 [Premium Articles]

Market analysis for week of September 20, 2021. The analysis focuses on major market indexes, ETFs, commodities and forex. Access to full article requires Premium Articles subscription or All in One subscription.

Report contents

  1. Weekly summary and recap.
  2. Analysis of major indexes.
  3. Popular ETFs.
  4. Asset ETFs
  5. Commodity ETFs.
  6. Factor ETFs
  7. Spot currency pairs.
  8. Markets to Watch.

1. Weekly summary and recap

  • U.S. stocks were lower on the week.
  • Selling pressures in high beta large caps subsided.
  • Low volatility large caps sell-off continued.
  • Bond prices were lower and yields rose.
  • Commodities gained but were off weekly highs.
  • Gold fell but crude oil rally continued.
  • The U.S. dollar index was higher on the week.

Recap (September 13, 2021 – September 17, 2021)

Large caps (S&P 500) ended the week down 0.6%. Tech stocks (NASDAQ-100) fell 0.7%. Small caps (Russell 2000) gained 0.4%. The Dow 30 fell 0.1%. High beta large caps gained while low volatility large caps fell. The CRB was up 0.8% with volatility in commodities rising. Year-to-date crude oil is up 49.2% followed by CRB index with 32.4% gain. Gold has year-to-date losses of 7.1% followed by Bonds Total Return at -1.3%.

2. Analysis of major indexes

VIX fell 0.7% to close at 20.81 for the week.

Last week I wrote:

[R]isks are increasing as indicated by the spike in implied volatility.

Implied volatility remained elevated as uncertainty about tapering and inflation remains dominated action. The odds are high for another spike in VIX towards 25 for next week. The S&P 500 ended the week 2.3% below all-time closing highs and there is potential for additional 7.5% decline towards the 200-day moving average in case the correction continues. The S&P 500 has remained above the 200-day moving average for 309 days and this is the longer such period since 442 days that ended March 29, 2018, with the correction starting when the index was 398 days above the average. Both the duration of price staying above the 200-day moving average and the magnitude of corrections that follow are random variables. See below following the S&P 500 chart for an estimate of when the probability of a large correction will reach critical levels.

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Specific disclaimer: This report includes charts that may reference price target levels determined by technical and/or quantitative analysis. No updates to charts will be provided if market condition changes occur that affect the levels on the charts and/or any analysis based on them. All charts in this report are for informational purposes only. See the disclaimer for more information.

Disclaimer:  No part of the analysis in this blog constitutes a trade recommendation. The past performance of any trading system or methodology is not necessarily indicative of future results. Read the full disclaimer here.

Charting and backtesting program: Amibroker. Data provider: Norgate Data

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