Positive Internal Market Metrics Fuel Rally From S&P 500 Support

In our previous September 26th Stock Market Update & Asbury Investment Management Video, we pointed out that the benchmark S&P 500 (SPX) was testing formidable underlying support at 3233 amid a Risk Off / Negative reading in our Tactical models, the Correction Protection Model (CPM) and Asbury 6. We said that as long as our models remained Risk Off, 3233 was likely to be broken and SPX would be on its way to a deeper decline.

However, our Tactical models turned back to Risk On / Positive as of October 5th, which turned 3233 support into the launching pad for the S&P 500’s next move higher. The chart below shows that SPX subsequently jumped 141 points or 4% higher over the next 5 days.

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S&P 500 daily since January

This chart is a prime example of why we are data-driven rather than trying to make predictions about the future, the latter which is often expensive if not losing game.

Table 1 below displays the current Positive (bullish) reading in our Asbury 6, which has been in effect since October 5th.  As long as the “A6” remains Positive, meaning 4 or more metrics are green, the current rally from 3233 is likely to continue.

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The Asbury 6

The bottom line is that, as improbable as this rally may be within a weakening economy and a global pandemic, we will continue to “follow the money” every day to stay on the right side of the market.

The Asbury 6 is a combination of six diverse market metrics that we use as a lie detector test for the market — to help identify real, sustainable market advances or ...

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