As equities remain on cruise control and there’s really not much new to report on the daily front I decided to take a peek at some of my longer term momentum charts. The ones that stood out all relate to market breadth, which refers to the ratio between advancing stocks vs. declining stocks. But why would we care about that?
I was born with a fairly pale complexion which has always forced me to stay out of the sun lest I end up looking like a roasted chicken after only minutes of being exposed to a UV index anywhere above 5. It’s not that I hate the sun – rather the sun seems to hate me, or at least it hates my skin as it insists on burning it. As a financial blogger who also trades for a living it’s easy to understand that summer is my least favorite season of the year.
All the civic chaos and social brinksmanship notwithstanding U.S. equities have brazenly continued to march higher and higher since the activation of the riot brigade. Much to the chagrin of a legion of political arsonists who would love nothing more than to see our entire nation go up in flames.
Mrs. Market appears to be suffering from an acute bout of market halitosis (a.k.a. market breadth) which was heavily advertised on various bearish watering holes yesterday. Goldman Sachs was particularly prolific on the subject, going as far as predicting an imminent ‘momentum’ crash – whatever that is. So let’s take a gander through some of our momo charts and see if indeed the proverbial jig is up for this counter rally.