Pepperstone logo
Pepperstone logo
  • English
  • عربي
  • Ways to trade

    Pricing

    Trading accounts

    Pro

    Premium clients

    Refer a friend

    Active trader program

    Trading hours

    24-hour trading

    Maintenance schedule

  • Trading platforms

    Trading platforms

    TradingView

    Pepperstone platform

    MetaTrader 5

    MetaTrader 4

    cTrader

    Integrations

    Trading tools

  • Markets

    Markets to trade

    Forex

    Shares

    ETFs

    Indices

    Commodities

    Currency Indices

    Cryptocurrencies

    Dividends for index CFDs

    Dividends for share CFDs

    CFD forwards

  • Market analysis

    Market news

    Navigating Markets

    The Daily Fix

    Meet the analysts

  • Learn to trade

    Trading guides

    CFD trading

    Forex trading

    Commodity trading

    Stock trading

    Crypto trading

    Bitcoin trading

    Technical analysis

    Day trading

    Scalping trading

    Upcoming IPOs

    Gold trading

    Oil trading

    Webinars

  • Professional Clients

  • Partners

  • About us

  • Help and support

  • English
  • عربي
  • Launch webtrader

  • Ways to trade

  • Trading platforms

  • Markets

  • Market analysis

  • Learn to trade

  • Professional Clients

  • Partners

  • About us

  • Help and support

Analysis

Equities

Macro Trader: Musings on Risk, A Low Vol Grind Higher

Michael Brown
Michael Brown
Senior Research Strategist
18 Jun 2024
Share
A quiet day before US traders leave their desks and markets close in observance of Juneteenth – with volumes seemingly likely to remain pretty thin even once the holiday has passed. Allow me, then, to present a few titbits on equities that may be of interest.

The S&P 500 has, at the time of writing, notched 30 record closes this year, the most since the 70 ATHs notched back in 2021. On a proportional basis, the benchmark index has closed at a record on 26% of all trading days in 2024. If the market were to keep up this pace for the entire year – which, of course, is by no means guaranteed – it would represent the third best year on record, after 1995 and 2021, in terms of the percentage of trading days on which the market scored a new record close.

Preview

On a similar note, it was interesting to see, on Monday, both the S&P 500 and Nasdaq 100 end the day in the green, despite Nvidia – dubbed by some as the ‘most important stock in the world’ – closing in the red. This is not a unique phenomenon, but it is relatively rare. This year, the S&P has ended in positive territory, with NVDA down on the day, just 16 times, while the Nasdaq has done so just 11 times. Perhaps one that may put to rest a few fears about narrow breadth and the high degree of market concentration.

Preview

In any case, the market seems to be getting into a holiday mode. The front S&P contract, again at the time of writing, has traded just a 16pt high-low daily range, the tightest such range since early-February. There might be more than the upcoming market closure at play here, though, with summer approaching (the impact of the EURO 2024 football shouldn’t be underestimated in dampening vol!), and the Fed – effectively – out of the equation until September. Tight ranges, low vol, and a steady grind higher in the broader market are themes we will likely have to get used to.

Preview

Seasonal trends, incidentally, support the idea of a steady grind higher, though of course such trends should never be solely relied upon as the backing for a trade. Over the last five years, July has – on average – proved to be the 2nd best month of the year for the S&P 500, with the index having ended the month in the green for 9 years in a row. Pedigree for the Nasdaq 100 is even stronger, with the index having rallied in July for 16 years on the spin. Couple this with the ‘Fed put’ remaining as flexible, and forceful, as it has done all year, and the ‘path of least resistance’ should continue to lead to the upside for equities, with dips likely remaining shallow in nature, and being bought into rapidly.

Preview

Some, at this stage, may cry ‘the market is overbought!’. And, they’d be right – the Nasdaq 100’s 14-day RSI currently resides just north of 80, well above the 70 handle which typically sparks such cries, and its highest level since 2018. Those seeing this as an automatic reason for the market to pullback, however, may well be disappointed – since that year, on a sample of 42 times that the RSI has crossed above 70, the index has delivered a positive one-month return 7 out of 10 times.

Preview

To wrap up, a look at forward vols. The May PCE print, next Friday, is clearly the next significant risk for markets to navigate, though with the figure being relatively easy to extrapolate from the CPI & PPI metrics – most models point to the core deflator rising 2.6% YoY – the data should already be well-discounted by market participants. Hence, we may have to wait for the June jobs report (5th July), or the June CPI print (11th July – what a great birthday present!) before some vol is injected back into the market, at least if the source of that vol is to be a macro catalyst.

Preview

The material provided here has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Whilst it is not subject to any prohibition on dealing ahead of the dissemination of investment research we will not seek to take any advantage before providing it to our clients.

Pepperstone doesn’t represent that the material provided here is accurate, current or complete, and therefore shouldn’t be relied upon as such. The information, whether from a third party or not, isn’t to be considered as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product or instrument; or to participate in any particular trading strategy. It does not take into account readers’ financial situation or investment objectives. We advise any readers of this content to seek their own advice. Without the approval of Pepperstone, reproduction or redistribution of this information isn’t permitted.

Other sites

  • The Trade Off
  • Partners
  • Group
  • Careers

Ways to trade

  • Pricing
  • Trading accounts
  • Pro
  • Premium clients
  • Active trader program
  • Refer a friend
  • Trading hours

Platforms

  • Trading platforms
  • Trading tools

Markets and Symbols

  • Forex
  • Shares
  • ETFs
  • Indicies
  • Commodities
  • Currency indicies
  • Cryptocurrencies
  • CFD forwards

Analysis

  • Navigating Markets
  • The Daily Fix
  • Meet the Analysts

Learn to trade

  • Trading Guides
  • Videos
  • Webinars
Pepperstone logo
support.ae@pepperstone.com
+97145734100
Al Fattan Currency House
Level 15, Office 1502 A, Tower 2
P.O.Box 482087, DIFC
Dubai, United Arab Emirates
  • Legal documents
  • Privacy policy
  • Website terms and conditions
  • Cookie policy
  • Whistleblower policy
  • Sitemap

© 2025 Pepperstone Financial Services (DIFC) Limited

Risk warning: Trading CFDs and FX carries significant risk. Trading OTC derivatives may not be suitable for everyone so please ensure that you fully understand the risks involved and take care to manage your exposure. You have no ownership of the underlying asset. Pepperstone Financial Services (DIFC) Limited does not issue advice, recommendations or opinion in relation to acquiring, holding or disposing of OTC derivatives nor is Pepperstone a financial advisor. All services are provided on an execution only basis. Pepperstone Financial Services (DIFC) Limited only provides information of a general nature and does not take into account your financial objectives, personal circumstances. We recommend that you seek independent personal financial or legal advice.

Pepperstone Financial Services (DIFC) Limited is registered at Al Fattan Currency House, Tower 2, Level 15, Office 1502 A, P. O. Box 482087, DIFC, Dubai, United Arab Emirates and is regulated by the DFSA under license number F004356.

The product issuer is Pepperstone Group Limited registered at Level 16, Tower One, 727 Collins St, Docklands, Victoria 3008, Australia and is licensed and regulated by the Australian Securities and Investments Commission, AFSL 414530. You should consider whether you are part of the product issuer’s target market by reviewing the TMD, and read the PDS and other legal documents to ensure you fully understand the risks before you make any trading decisions.