Yesterday, I touched on the resoundingly negative breadth that conflicted with positive moves in the major averages. While this morning's breadth is a touch more tolerable, it's still nothing to write home about.
As I type the S&P 500 is up 0.41% while just over 40% of its members are in the red. The Nasdaq Comp's up 0.60%, while roughly half of its members are trading lower so far this morning...
Hmm... what's that say about market internals?
Well, historically-speaking, it's a red flag. But I must say, today's market has become so, let's say intervened in, injected, or however you'd describe a market that garners unrelenting attention from policymakers, that historical red flags have been utterly useless indicators since, say, last spring...
Nevertheless, breadth -- timing signal or not -- indeed remains an important tell in terms of overall market health, therefore we'll continue to track and consider it in our own assessments of general conditions.
Digging deeper than simply the daily noise, here's Bespoke Investment Group on the present state of affairs:
"While the cap-weighted S&P 500 is less than 2% from all-time highs, the average stock in the S&P 1500 index (made up of large-caps, mid-caps, and small-caps) is 15.8% from its 52-week high."
Remarkable! Everybody's U.S. benchmark is essentially at all time highs, while the average stock across the broader market is off its yearly high to nearly bear market proportions!
In terms of breadth globally, well, save for Europe hanging in there, let's just say it's been a rough relative road of late for global macro managers.
White line = SP500, green = Europe, blue = Developed Asia-Pad, purple = Emerging Markets -- Year-To-Date:
"Invariably, investors who disregard where they stand in cycles are bound to suffer serious consequences."
Have a great day!