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As US Election Heats Up, Investors Brace for Volatility
A U.S. stock market that has weathered trade wars, weak corporate earnings, and now a U.S.-Iran conflict to continually hit record highs faces a new obstacle: the 2020 U.S. election season. By the way, Old_Skeet's market barometer scores the S&P 500 Index as extremely overbought as I write.
I have been commenting on Old_Skeet's market barometer for about five years now. With this, there is quite a history if you wish to venture back through the stack and read these post.
But, to provide a short recap of how it works here is a short blurb about it.
Old_Skeet's market barometer follows the S&P 500 Index and is driven by three major data feeds. They are 1) an earnings feed that is comprised of both TTM and forward earnings estimates, 2) a breath feed, and 3) a technical score feed. In addition to the three main barometer feeds there are a few other data influences that are often times used. They include (but are not limited to) the yield of the US10YrT, short volumes for the Index, and the Index's dividend yield.
These data readings are entered into a spreadsheet and when scored produce a barometer reading. A barometer reading of 150 is in the middle of fair value and scales upward to undervalued, oversold and extremely oversold when a reading of 168 or higher is reached. Moving in the other direction scales to overvalued, overbought, and extremely overbought when a reading of 132 or below is reached. A higher barometer reading indicates there is more investment value in the Index over a lower reading.
I simply use the barometer as an aid to help me determine when good investment value is found (or to prevail) within the Index itself. Through 2019 the barometer produced readings ranging from a high of 183 indicating that the Index was extremely oversold, as we opened the year, down to a low reading of 122, during the last week of December, indicating that the Index was extremely overbought.
With this, I'm not a buyer of the Index at this time.
Comments
I have been commenting on Old_Skeet's market barometer for about five years now. With this, there is quite a history if you wish to venture back through the stack and read these post.
But, to provide a short recap of how it works here is a short blurb about it.
Old_Skeet's market barometer follows the S&P 500 Index and is driven by three major data feeds. They are 1) an earnings feed that is comprised of both TTM and forward earnings estimates, 2) a breath feed, and 3) a technical score feed. In addition to the three main barometer feeds there are a few other data influences that are often times used. They include (but are not limited to) the yield of the US10YrT, short volumes for the Index, and the Index's dividend yield.
These data readings are entered into a spreadsheet and when scored produce a barometer reading. A barometer reading of 150 is in the middle of fair value and scales upward to undervalued, oversold and extremely oversold when a reading of 168 or higher is reached. Moving in the other direction scales to overvalued, overbought, and extremely overbought when a reading of 132 or below is reached. A higher barometer reading indicates there is more investment value in the Index over a lower reading.
I simply use the barometer as an aid to help me determine when good investment value is found (or to prevail) within the Index itself. Through 2019 the barometer produced readings ranging from a high of 183 indicating that the Index was extremely oversold, as we opened the year, down to a low reading of 122, during the last week of December, indicating that the Index was extremely overbought.
With this, I'm not a buyer of the Index at this time.
Old_Skeet
Maybe I’m being “picky”, but the missing comma makes a substantial difference in meaning here.
1) As U.S. election heats up, investors brace for volatility.
2) As U.S. election heats up investors, brace for volatility.
Regards