SPDR S&P 500 ETF Trust Technical Update and Bill Gross Assessment

bill grossDavid Fabian: Just when you think everything is looking good, the market pulls a fast one on you. That’s what happened to me this week on the day after I posted our monthly video (see below) stating large-cap stocks were still indicating a bullish uptrend.

Thursday proved to be rather good day for the bears with a drop of 1.6% that has many traders worried that the Alibaba IPO was the ultimate top. More importantly, the SPDR S&P 500 ETF (NYSEARCA:SPY) broke below its 50-day moving average for the fourth time this year.

SPY

I generally regard this technical event as a yellow flag in the market that is owed some caution with a healthy dose of reality that little damage has been done so far.

All three previous attempts at a correction this year ended in some mild probing below this intermediate-term support line and then a blast off to new highs. There is no way to know if this time will be any different, but with the market only 2.26% off its all-time high, I am not ready to dive into the bunker quite yet.

September volatility is nothing new to contend with and I wrote about several conservative ETF strategies that may be options to hedge your portfolio.

The real test for stocks on the downside is if they will break that previous line of support near $190 that was established in August or will this be a shallower pullback?

Some additional thoughts on international markets, commodities, currencies, and high yield bonds in the following video may help shed some light on this matter.

Bill Gross To Leave PIMCO

The financial world and more specifically the bond market was rocked this morning by the news that Bill Gross would be leaving PIMCO and joining Janus Capital Group. Gross was an original founder and long-time Chief Investment Officer of this bond fund giant.

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