The market correction we have been talking about over recent weeks HAS been happening, but it is underneath the surface of the major market indices.  As we pointed out in our macro post yesterday, despite only being one day removed from an all-time high in the underlying , less than half of the S&P 500 (SPX) stocks are above their 10-day moving average.  Clearly, the biggest stocks are keeping the SPX higher while the average stock appears to be correcting.  While the media is sure to focus on the major indices when they begin to correct like the average stock, we note that is what happens toward the end of the correction rather than the beginning.  As a result, over the coming couple weeks, we want to begin getting aggressive once the market gets a bit more oversold.  A clear sign of that for us, and what got us more offensive in early October was:


  • The CBOE Volatility Index (VIX) spikes above 20 (currently 12)
  • The percentage of SPX components above their 10-day moving average drops to below 10% (currently 45)

Past performance is not a guarantee of future results. Index returns are unmanaged and do not reflect the deduction of any fees or expensesAll data points are sourced from Bloomberg as of 11/22/19 unless noted otherwise.


Figure 1 – VIX is still complacent at 12.

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