As discussed in yesterday’s Market Notes, last week’s rally has us questioning whether we remain in the choppy market that has been experienced on many levels for the past few months or if we are poised for some degree of resolution to the upside. Today, we’ll take a closer look at what that could mean across stocks, bonds and commodities. As market depth evaporates ahead of the Labor Day weekend, there is no reason to believe that what we talk about has to happen this week.
The S&P 500 is getting plenty of press these days for the number of new highs it has made in 2021 (over 50 at this point). I’m more focused, however, on what the Value Line Geometric Index is doing. This index has gone nowhere over the past three months (while the S&P 500 has risen nearly 8%). A new high by this index (and a return to leadership on a YTD basis) would be evidence of the type of broad strength that tends to be sustainable. It’s trying to move in that direction, but there is more work to be done.
