Topley’s Top Ten – October 15, 2018

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1.Volatility Very Normal in October.

Thoughts on the Market Sell-Off

Posted by lplresearch

  • The S&P 500 Index had one of its least volatile third quarters in history.In fact, it was the first year since 1963 that the index’s usually volatile third quarter didn’t have a single 1% change (up or down). The S&P 500 had gone 74 consecutive days without a 1% move—the 10th longest streak in history. The bottom line is: Equity markets were wound tight and some type of volatility was likely.
  • October has historically had above-average volatility and average returns.October is known for spectacular crashes (1929, 1987, and 2008), but in reality it’s about average in terms of returns. What it really should be known for is volatility. Incredibly, no month has seen more 1% changes (up or down) than the month of October for the S&P 500 going back to 1950.

https://lplresearch.com/2018/10/11/thoughts-on-the-market-sell-off/

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Topley’s Top Ten – October 10, 2018

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1.Interesting Comments on Market Breath….Narrow Leadership.

Average Small Cap Stock in “Bear Market” Territory

Oct 9, 2018

Most people watching have noticed that the recent weakness in equities has been especially tough on the small-cap space, and another illustration of that trend is to look at the distance that stocks are currently trading from their 52-week highs.  Within the large-cap S&P 500, the average stock is currently 13.2% below its 52-week high.  Moving down the market cap spectrum, though, the numbers get progressively worse.  In the S&P 400 mid-cap space, the average spread is 16.9%, while members of the S&P 600 Small Cap index are down an average of 20.7%.  Using the standard bear market definition of a 20% decline from a high, the average small-cap stock is in a bear market!

Looking at the spreads between current prices and 52-week highs, stocks in the Consumer Discretionary sector are further from their highs than any other sector (-22.9%), but Technology isn’t far behind at 21.4%.  For two sectors that were market leaders, Tech and Discretionary have certainly seen a good deal of profit-taking lately.  Outside of these two, other sectors where the ‘average’ stock has seen a pretty sizable pullback from its 52-week high include Materials (-19.8%), Health Care (-17.9%), and Consumer Staples (-16.6%).  On the other end of the spectrum, Utilities (-6.1%) is the only sector where stocks are currently down by an average of less than 10% from their 52-week highs.

https://www.bespokepremium.com/think-big-blog/

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