📖 Your Q2 Earnings Guide: Discover the Stocks ProPicks AI Highlights to Jump Post-EarningsRead more

Stock Market Internals Are Deteriorating Rapidly

Published 06/10/2024, 02:31 AM
NDX
-
US500
-

The S&P 500 index reached an all-time high this week; however, market internals continue to flash warning signs. A handful of large-cap semiconductor stocks appear to be propping up the market, but they may be the last chips to fall. Here are some of the factors that concern me:

  • The number of stocks within the S&P 500 index above their 50-day and 200-day moving averages continues to decline.
  • The number of stocks within the S&P 500 and Nasdaq 100 that are bullish, as defined by the Bullish Percent Index, has been declining since the beginning of the year.
  • The Summation Index (a breadth indicator) has been declining since the beginning of the year, forming a bearish divergence relative to the S&P 500 index.
  • The number of stocks within the S&P 500 index that are hitting new 52-week highs has been decreasing for the past couple of weeks, as the S&P 500 index reached an all-time high this week.
  • There is relative weakness in a plethora of sectors and industry groups, including small caps, computer software, consumer discretionary, transportation, materials, energy, financials, and industrials.
  • The equal-weighted S&P 500 has not confirmed the new all-time high hit by the cap-weighted S&P 500 index.

Client Account Update

I have progressively reduced the total equity allocation in our client accounts.

Risk management is the name of the game right now!

Latest comments

Loading next article…
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.