S&P 500 momentum signals further upside
The guests argued that while large-cap tech is historically overextended, the broader S&P 500's two-standard-deviation move suggests the index still has room to run.
The argument
Historically, when the S&P 500 has crossed the two-standard-deviation threshold, it was higher 50 trading days later in every instance over the last decade, with an average forward return of 7.3%.
The thesis, stress-tested
✓ What validates it
- ✓S&P 500 trading higher 50 days post-signal
- ✓Two-year Treasury yields stabilizing or falling below recent highs
▸ Risks discussed
- ▸Rapidly rising interest rates causing recession fears
- ▸A severe tech sector selloff dragging down the market-cap-weighted index
Hear it yourself
"This is so far off the charts that it is unprecedented, and therefore, the reaction to this to the downside is unknowable. But I think people would say, like, alright. But mentally, I can picture previous extreme rallies in tech, and I know that those, didn't necessarily have a nice aftermath. And, like, everybody will revert back to twenty five years ago, the bursting of the dot com bubble. Like, we're saying that this fifty day move, not the whole tech rally, but this particular moment in time is extreme even versus that period of time. Any fifty day period, let's say, in 1998 or 1999."
05:10
AFFILIATE LINK · ZORTIX MAY EARN A COMMISSION · NEVER A RECOMMENDATION TO TRADE