S&P 500 Bearish Trend Reversal

"the index has had a sharp surge often seen at major market tops"

"Kochuba added that the S&P 500 has fallen below a 'risk pivot' and that he'd be adding to short-dated, cheap, out-of-the-money put 'flies' with bearish directional bias."

"Growth stocks now represent more than 50 per cent of the index, compared with less than 20 per cent about 30 years ago... The shrinking weight of cyclical stocks has weakened the S&P 500's direct connection to economic conditions and other macroeconomic developments."

""The corollary is that although stocks may very well have some gas left in the tank, the current uptrend is likely past its prime. If this 1,357-day bull market lasts another 1,357 days, it is unlikely to deliver the same 123.2-per-cent gain.""

"Oppenheimer chief market technician Ari Wald warned that, while a bullish rotation in the market 'remains intact,' he also sees the 'risk of a seasonal correction' that would take the S & P 500 toward 7,000."

"The S & P 500 reversed earlier gains to trade 0.3 per cent lower at 2.30pm in New York, dragged down by losses in information technology and communication services."

"Put contracts on the index are pricing in a 10.5% chance it closes at that level on Aug. 31, according to data from ThinkOrSwim."

"The factor most likely to challenge his constructive outlook would be a broad-based earnings disappointment across corporate America."

"Goldman notes that its proprietary Risk Appetite Indicator (RAI) has jumped to 1.2, marking the highest level since 2021. That signals an increased risk of corrections and lower near-term returns."

"Consequently, a selloff in this cohort could have the effect of dragging a lot of other parts of the market with it (Mag7 included), which would have the effect of driving both index correlation and volatility higher."