Since my February 13th newsletter flagged rising market volatility, market risk has been at the amber level, with 21-day Twiggs Volatility fluctuating between 1.0 and 2.0 percent on the S&P 500. A large trough that respects the 1.0 percent level, as in 2015 below, would be sufficient warning to cut back exposure to stocks because of elevated risk.
Yesterday, Volatility (Twiggs 21-Day) on the S&P 500 retreated below 1.0 percent, suggesting a return to the lower-risk green zone. Breakout above 2800 would signal reviving investor confidence, and an advance to test 3000.
Colin Twiggs is a former investment banker with almost 40 years of experience in financial markets. He co-founded Incredible Charts and writes the popular Trading Diary and Patient Investor newsletters.
Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.
Focusing on interest rates and financial market liquidity as primary drivers of the economic cycle, he warned of the 2008/2009 and 2020 bear markets well ahead of actual events.
He founded PVT Capital (AFSL No. 546090) in May 2023, which offers investment strategy and advice to wholesale clients.