Cross-Asset Strategist & Quantitative Analyst, Pennock Idea Hub

Cam Hui

Cam Hui has been professionally involved in the financial markets since 1985 in a variety of roles, both as a quantitative equity portfolio manager and as a sell-side analyst. He graduated with a degree in Computer Science from the University of British Columbia in 1980 and obtained his CFA Charter in 1989.

Cross-Asset Strategist & Quantitative Analyst

Pennock Idea Hub

We are creators of independent equity research. The Pennock Idea Hub team are veterans of the investment industry. Much of our team has spent their careers at Merrill Lynch, Deutsche Bank, RBC Capital Markets and Wood Gundy. We have taken every aspect of research back to the studs and returned to first principles. The Pennock Idea Hub marries the interests of the sell and buy side. 

We offer the best research for institutional investors by:

-Only publishing research from veteran analysts
-Eliminate the inherent conflicts of the traditional sell and buy side relationship
-Ensure our team is always accessible; collaboration with clients nurtures our collective success

Cross-Asset & Quantitative Research

Cross Asset Strategy

We have been writing about the possibility of a blow-off top ever since the S&amp;P 500 rose above its rising trend line (see <a href="https://www.smartkarma.com/insights/a-blow-off-top-ahead" target="_blank" rel="noopener">A Blow-off Top Ahead?</a>). In the past, blow-off top episodes were characterized by a spike upward in one week, followed by a precipitous drop the next week.This time, the S&amp;P 500 experienced a slow-motion pullback as it visited the site of the 50 dma during two consecutive weeks. Is the pullback over?We conclude that neither the bulls nor the bears have full control of the tape. Our base-case scenario calls for a range-bound market. Tactically, the market was oversold and it was due for a relief rally. We are open to the possibility that the market could test the old highs and make marginal new highs. We would monitor these bullish tripwires as signals that the bulls have regained control of the tape:•           A wholesale violation of relative support by the defensive sectors of the market.•           The VIX Index decisively falls through its 20 dma, which would be a signal of bullish momentum.On the other hand, if the VIX maintains support at its 20 dma, expect a sideways choppy market and a possible retest of the S&amp;P 500 50 dma.

We have been writing about the possibility of a blow-off top ever since the S&amp;P 500 rose above its rising trend line (see A Blow-off Top Ahead?). In the past, blow-off top episodes were characterized by a spike upward in one week, followed by a precipitous drop the next week.This time, the S&amp;P 500 experienced a slow-motion pullback as it visited the site of the 50 dma during two consecutive weeks. Is the pullback over?We conclude that neither the bulls nor the bears have full control of the tape. Our base-case scenario calls for a range-bound market. Tactically, the market was oversold and it was due for a relief rally. We are open to the possibility that the market could test the old highs and make marginal new highs. We would monitor these bullish tripwires as signals that the bulls have regained control of the tape:•           A wholesale violation of relative support by the defensive sectors of the market.•           The VIX Index decisively falls through its 20 dma, which would be a signal of bullish momentum.On the other hand, if the VIX maintains support at its 20 dma, expect a sideways choppy market and a possible retest of the S&amp;P 500 50 dma.

Is the S&P 500 Pullback Over?