From the desk of Steve Strazza.
Our Top 10 report was just published; our weekly report highlighting the best 10 ideas and respective charts we are seeing across the markets this week.
1. Weakening Internals In The World’s Top Index
We’ve been vocal about the strong internals supporting US Equity markets and have pounded the table on one historic breadth reading after the next as they’ve continued to pop up in a variety of the major indexes and sectors since last summer. Surprisingly enough, one of the indexes that did NOT experience bullish initiation thrusts was the Nasdaq 100. This is likely because of the fact the bar was already set so high for this index due to its strong performance in years past. Regardless of the reason, unlike indexes that did experience thrusts, we’re paying attention to divergences in many of the Nasdaq’s breadth indicators. There’s been a notable deterioration in participation beneath the surface in what’s been the world’s strongest stock index for years. With the index finally showing some weakness and appearing to cede its leadership role to some of the more cyclical indexes, we’ll be keeping an extra close eye on the internals going forward to gauge the health of large-cap tech/growth stocks.