Weekly S&P500 ChartStorm - 13 February 2022

Callum Thomas

Topdown Charts

The Weekly S&P500 ChartStorm is a selection of 10 charts which I hand pick from around the web and post on Twitter. The purpose of this post is to add extra color and commentary around the charts.

The charts focus on the S&P500 (US equities); and the various forces and factors that influence the outlook - with the aim of bringing insight and perspective.

Hope you enjoy!

1. Invasion Risk: The developing situation with regards to the extensive Russian military mobilization surrounding Ukraine was initially ignored by the market (similar to how covid was also initially ignored in early 2020).

n.b. 2014 (Crimea annexation) as most will point out, didn't really matter to the S&P500 -- but it is worth reflecting that S&P500 valuations are about 60%+ higher vs then and the Fed is about to start hiking rates. The other aspect is if it goes ahead it will be on an entirely different scale, and would likely have major impact on commodity markets: extending the cost-push inflation that has taken hold.

Source: @topdowncharts

2. Geopolitical Even Risk Reaction: That said, here's a useful selection of past geopolitical events and the S&P500 reaction. Again though it's difficult to find a direct comparison, and to also factor in the wider background context (valuations/policy etc!)...

Source: @RyanDetrick

3. “Defensive“ Stocks: Aerospace & Defense equities are stirring…

(albeit one issue with this chart is the ailing airliner business — hit hard by covid and issues with Boeing - one of the largest stocks in this)

Source: @topdowncharts

4. Invasion Risk Hedge? Russia is a major oil producer, most expect energy prices would soar on a significant escalation -- meanwhile stocks probably stumble...

= potential for more upside in this chart

Source: @LizAnnSonders

5. Gold vs Stocks: Similarly, gold likely rallies on invasion (especially relative to stocks), so again, another one to keep an eye on…

Source: @TaviCosta

6. Foreign Buying of US Equities: This is one of those things you tend to see later in the cycle (and further reinforcing the widening valuation gap between US vs Global equities). Time to go against the crowd?

Source: @MFHoz

7. Peak Put Panic? With a looming wall of worry, investors have been frantically buying up put options to protect against perceived downside risks.

Source: @MacroCharts

8. Stock Splits: Split... UP

Stock splits seem kind of stupid especially in the age of fractional share ownership.

But history tells us stock splits make stocks go up…


Source: @YunLi626

9. Unicorn Boom. 1000 and counting…

Source: @CBinsights via @IndiaER

10. Value Creation (Compounding): "96% of the value is created after year-10"

(aka compounding, also $ vs %, but still: important reminder)

…albeit, you do have to survive long enough for that, as the article notes.

Source: @studios

Thanks for reading!

Callum Thomas

Founder and Head of Research at Topdown Charts

Feedback/questions/views welcome in the comment section below:

Callum Thomas
Head of Research
Topdown Charts

Callum is Head of Research at Topdown Charts. Topdown Charts is a chart-driven macro research house covering global Asset Allocation and Economics.

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