Recent market trends, including declining oil prices and rolling Treasury yields, suggest a potential surge in the S&P 500, as observed historically. Bank of America specifically highlights the benign High Yield OAS (Option-Adjusted Spread) as a supporting factor for a summer rally. Furthermore, indications such as the VIX (Volatility Index) being rebuffed at its downtrend line hint at additional market momentum.
The last time this happened, S&P 500 saw a +30% rise
Oil has shown to be an accurate leading indicator for the 10-year Treasury yield
With oil declining and yields now rolling over
The stage is set for more upside in the market pic.twitter.com/pybsKRLdMp
— Game of Trades (@GameofTrades_) May 8, 2024
This has been a solid money maker:
VIX gets rejected at its downtrend line
Market does another leg up
Wash, rinse, repeat! pic.twitter.com/Ff1Orsg1EG
— Game of Trades (@GameofTrades_) May 9, 2024
The benign High yield OAS supports the case for a summer rally
BofA pic.twitter.com/x5TjjxCNro
— Win Smart, CFA (@WinfieldSmart) May 9, 2024