Gold News

Stocks Get Bad Breadth

Equal-weight S&P gives the lie to headline S&P...
The US STOCK MARKET has bad breadth as participation thins out markedly, writes Gary Tanashian in his Notes from the Rabbit Hole.
Below are a few examples.
The equal weight S&P500 index is fading the headline SPX per this chart which we feature occasionally in NFTRH but update the status of most weeks.
SPX new highs/lows is diverging the headline as well.
But let's also take a look at the thinning out going on in big Tech as the headline powers higher.
Now take a look at the disgusting charts of mid caps below.
Like small caps, they are technically in roll over mode as long as they remain below the daily SMA 50 (blue), which is also starting to roll over.
The big names that everyone knows are doing the lifting, and that is not positive.
It's man and machine rotating into the perceived safety of the biggest of big Tech.
Side note: I recently sold MSFT and AAPL (while hanging on to AMZN for now) because this is late stage signaling.
Sure, the Teflon Don (AKA the US stock market) could escape unscathed as it sometimes does after painting such obvious bearish divergences. 
But that does not mean the divergences are not there and have not in the past foretold bearish things to come.
Add to that thin summer trading and if you're not having at least some level of caution you're a braver person than I.

Gary Tanashian successfully owned and operated a progressive medical component manufacturing company for 21 years, through various economic cycles. This experience gave Gary an understanding of and appreciation for global macroeconomics as it relates to individual markets and sectors. Along the way, Gary developed an almost geek-like interest in technical analysis (TA), to add to a long-time interest in human psychology. Various unique macro market ratio indicators were also added to the mix, with the result being a financial market newsletter, Notes From the Rabbit Hole (NFTRH) that combines these attributes.

See the full archive of Gary Tanashian.

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