Friday, June 11, 2010

May 2010 Rewind - Sovereign Debt Cascade

After a rocky April, May was a veritable cascade reminiscent of Fall 2008, featuring an all-in retrace now well past a 10% "official" correction here at the mid-month on sovereign debt contagion and building double-dip worries.

The S&P 500, Dow Jones Industrials and NASDAQ 100 cash indices all finished lower for the month by -8.20%, -7.92%, -7.41% respectively for negative annual readings across the board. With many major indices now just under their respective 200-day moving averages and volatility still fairly high and erratic, it feels as if the markets could run hard either direction at any moment.

Sentiment: Negative
Volatility: Moderate to High (VIX 20-46)
Direction: Highly Negative

The Style-Box was calculated using the following PowerShares™ ETFs: Small-Growth (PWT), Small-Value (PWY), Mid-Growth (PWJ), Mid-Value (PWP), Large-Growth (PWB), and Large-Value (PWV). The Sector-Ribbon was calculated using the following Select Sector SPDR™ ETFs: Materials (XLB), Industrials (XLI), Energy (XLE), Staples (XLP), Discretionary (XLY), Financials (XLF), Technology (XLK), and Healthcare (XLV). The Standard & Poors 500, Dow Jones Industrial Average and NASDAQ 100 may be traded through ETF proxies, including the SPY or IVV, DIA and QQQQ, respectively.

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