The following charts and graphs present a simplified birds-eye view of how the
S&P 500 Index, and its volatility, performed in
Q3 of 2017, as well as
year-to-date.
But, first, a look at the
Major Indices and
9 Major Sectors and how they have fared
year-to-date and during
Q3...
MAJOR INDICES
Eight of the nine
Major Indices, namely, the Dow 30, Dow Transports, S&P 500, Nasdaq 100, Nasdaq Composite, Russell 2000, S&P 100, and Nasdaq Transportation Indices closed out Q3
at or near all-time highs, as shown on the following
1-Year Daily charts.
The following
Year-to-date graph shows the percentages gained for the
Major Indices.
The
SPX has gained
12.53%,
so far, this year. This exceeds my forecast of around an
11% gain for the entire year, as outlined in
my post of December 1, 2016. The
Dow 30 regained and held its footing above
22,000, and the
SPX,
OEX, and
NDX reached their
"Big Round Numbers" of
2500,
1100, and
6000, respectively, as I cited as a possibility on
August 4.
The next graph shows the percentages gained during
Q3 for these
Major Indices.
Market players were willing to add more risk in the form of
Small-cap stocks.
9 MAJOR SECTORS
Four of the nine Major Sectors closed out Q3 at or near their highs for the year, namely, Technology, Industrials, Materials, and Financials, as shown on the following 1-Year Daily charts.
Technology and Health Care have gained the most, so far, this year, followed by Industrials, Materials, Financials, Utilities, Cyclicals, and Consumer Staples, while Energy is -6.69%, as shown on the following Year-to-date graph.
The leader for
Q3 of 2017 is Technology, followed by Energy, Materials, Financials, Industrials, Health Care, Utilities, Cyclicals, while Consumer Staples is -1.13%.
S&P 500 INDEX
Each candle on the following four charts of the SPX represents a period of one year, one quarter, one month, and one week, respectively.
Its price, at 2500, is now entangled in a web of triple major resistance in the form of a 27-year Fibonacci fanline, an 8-year Fibonacci fanline and an 8-year external Fibonacci retracement level.
The momentum indicator is presenting somewhat mixed signals on these timeframes...with the weekly, monthly and quarterly hinting of a possible buying slowdown, stagnation, or reversal looming in Q4.
SPX:VIX RATIO
Each candle on the following four charts of the SPX:VIX ratio represents a period of one year, one quarter, one month, and one week, respectively. Price has closed near its all-time high and will be facing major channel and external Fib retracement resistance around the 280 level.
The momentum indicator is also presenting mixed signals on these timeframes...with the weekly and monthly hinting of possible higher volatility occuring in
Q4. I recently wrote about higher volatility looming for
Q4 here. Price will need to remain above
250 in the short term, and above the
200 New Bull Market level in the medium term, in order to confirm a sustainable upward bias for the
SPX.
CONCLUSIONS
With both the SPX and SPX:VIX ratio at/near their all-time highs, and at or near long-term major resistance, technically, we could very well see some major profit-taking occur in equities, in general, in Q4, on increasing volatility, with a rotation into Commodities, the U.S. Dollar, Cyclicals, Consumer Staples, Utilities, and maybe Financials.
Watch for the SPX to either remain above 2500, or drop below...and for price on the SPX:VIX ratio to either remain above the 250 level, or drop below...to signal either continued low volatility, or an increase for Q4 of 2017.
