[PLUS] August Weight of the Evidence Dashboard: Breadth Struggles Contributing to Cautious Message
August 3, 2021
Key Takeaway: Deteriorating breadth has moved beyond just the expiration of last summer’s breadth thrusts and includes fewer and fewer stocks, industry groups and global markets in uptrends and more and more making new lows across various time frames. Surging inflation has sapped excess liquidity from the market and while earnings revisions continue to move higher, the positive economic surprise environment of the past year is now a thing of the past. Sentiment indicators suggest investor appetite for risk is diminishing, but there is little evidence of fear or pessimism. If historical tendencies hold true in 2021, the final five months of the year could be a more challenging environment for the indexes than were the first seven months.