From the desk of Willie Delwiche.
- Investors are optimistic, but momentum isn’t confirming price strength
- While indexes rally, breadth trends are stumbling
- Big rebound in earnings is already priced in
The NASDAQ Composite rallied to a new all-time high this week. The S&P 500 fell just shy of a record close of its own. While sentiment indicators suggest that investors are celebrating these new highs, a closer look shows that index-level price strength is not being confirmed by momentum. In fact just the opposite is happening, with weekly momentum trends continuing to move lower.
The Value Line Geometric Index has moved from new high to below its 10-week average in the space of a week. Momentum has peaked and is moving lower. [Read more…]