Riskdial @ +31, down 11. Volatility and defensive sector outperformance have knocked it back. Tomorrow we have FOMC. What is beginning to slightly worry me is that it is not pushing higher over +50/60. The market is strong, the trend is definitely risk ON, we are correctly positioned, yet at this stage in previous cycles the score was approaching +100, as all spreads had more or less lined up in unison. It might just be a question of a few more days/weeks before that is achieved, but more likely it is indicating a weaker trend than the ones from 2013-15 and 2016- 2018. That would be understandable, yet we will see. It is enough to make me switch to call options as opposed to outrights.
The Deviations red line comes in at 307.15, so still a full 2% higher than today’s close. The market has been treading water enough to get the Deviations lines to diverge and can therefore move higher at any stage. One should NOT fight a new closing high. We are in a position to advance with risk being favored over safety. Look at the Sunday video (link in Weekly Review) for detailed updates of range expectations.
A stock to look at today is: KSU (buy on all indicated pullbacks). There are approximately 100 stocks in S&P 500 with a perfect trend score.
We are in Daily, Weekly & Monthly Risk On.