Courtesy of Doug Short’s Advisor Perspectives.
Despite better-than-expected April Retail Sales and a conspicuous uptick in Consumer Sentiment, US equities had a bad day. Our benchmark S&P 500 opened fractionally higher and hit its 0.13% intraday high in the opening minutes. It then fell to its modest morning low, rebounded into the shallow green and then sold off more aggressively to its -1.02% intraday low shortly before the final hour. A slight drift higher subsequently trimmed the closing loss to -0.85% for the day and -0.51% for the week, the third consecutive weekly decline. At its intraday low, the index briefly dropped into the red year-to-date.
As for the old “sell in May” adage, after nine sessions, the index is remains near the flat line at -0.06% for the month.
The yield on the 10-year note closed at 1.71%, down four basis points from the previous close and eight bps from the previous weekly close.
Here is a snapshot of past five sessions in the S&P 500.
Here is a daily chart of the S&P 500. At today’s close the index has fallen below its 50-day moving average. Trading volume was unremarkable.
A Perspective on Drawdowns
Here’s a snapshot of selloffs since the 2009 trough.
Here is a more conventional log-scale chart with drawdowns highlighted.
Here is a linear scale version of the same chart with the 50- and 200-day moving averages.
A Perspective on Volatility
For a sense of the correlation between the closing price and intraday volatility, the chart below overlays the S&P 500 since 2007 with the intraday price range. We’ve also included a 20-day moving average to help identify trends in volatility.
