The good news is the S&P 500 and several other large-cap US indexes are back at all-time highs, however, the bad news is there remains a lack of confirmation from breadth and momentum readings around the world.
Needless to say, it was easier to be buying stocks last month than it is today, but let's avoid getting into the weeds and simply look at the number of markets around the world above their 2018 highs.
Below is a table of the global equity markets we track prices in their local currencies. While there are performance stats from several key inflection points like the January 2018 and September highs in the S&P 500, as well as its bottom on December 24th, we want to focus on the left-most "Change From 2018 Highs" column.
This compares the market prices now to where they were at their highest point in 2018, or in other words, it gives us an idea of what the trend is.
Currently, the median stock market in the world is 6.22% off its 2018 high.
Click on table to enlarge view.
An uptrend is a series of higher highs and higher lows, right? So if we see an expansion in the number of markets above their 2018 highs, that must mean there is an expansion in the number of uptrends occurring.
Unfortunately, that's not what we've seen yet. Only 20% of these markets are above their 2018 highs despite six full months of aggressively rallying off their Q4 2018 lows.
So what could potentially change this weak breadth data?
We look to the punny title of this post for that answer.
Time.
A pause to digest gains and allow current leaders to reset and money to rotate into some of the laggards would be extremely constructive in our opinion. Weaker Dollar and rotation into Emerging Markets, Commodities, etc. would all be supportive of Equities as an asset class.
The longer we hang out up here and the more times we test these all-time highs, the higher the likelihood we ultimately break out and begin the next leg of this secular bull...even if we get there one market at a time.
For now though, these are the conditions we've got to work with. Luckily there are plenty of other things moving, like the US Dollar and Gold, that are offering opportunities while Equities figure themselves out.
You need to have a subscription to access this content in full.
