Doing Things Differently Today

Rebalance aside, let's zoom out.

The market has put together an impressive rally over the last two weeks, with the S&P 500 up in 8 of the last 10 sessions. Amid that run, one out of the two “declines” was a loss of just 0.03% — let’s call it flat, instead.

That said, we’re in the midst of a massive rebalance.

From Bloomberg:

JPMorgan Chase & Co. projects pension and sovereign wealth funds are poised to rebuild risk-on positions that have fallen in value between Russia’s invasion of Ukraine and rising inflation -- with a potential $230 billion equity-buying spree…An inflow of at least $100 billion and as much as $230 billion could trigger gains of between 5% and 10% to global stocks.

I also found this interesting: 

The U.S. Treasury market endured one of its worst weeks of the past decade last week while an index of Treasuries is down 3.8% this year, more than in any full year on record in Bloomberg data beginning in 1973. “The big difference time is that bonds are not up. This is not a standard bear market,” Deluard said.   

Let’s let the rebalance play out. I don’t want to get “too cute” with the technicals. But I would love some sort of dip into support, setting us up for a potentially larger move in April.

What does that move look like? Here I wanted to zoom out on the four indices to get an idea of what we could be talking about.

Zooming Out on the S&P 500, Nasdaq, Dow and Russell