Friday, May 26, 2023

Quote of the Day: "What's Odd Here"

Despite the poopooing of the importance of breadth I'm hearing from a number of market commentators, we keep harping on it herein because, as I illustrated in yesterday's video (posted this morning), it's historically relevant.

With regard to market commentators, and participants, the louder the chorus of bulls, and the harsher the pain felt by those suffering bears who are beholden to an equity benchmark -- and are thus "forced" to capitulate and join the bulls -- all other things equal, and ironically, the greater the ultimate downside risk... I.e., the larger the bull herd, the larger the stampede if/when markets crack.

Back to breadth, here's from Spotgamma this morning:

"What's odd here is that divergence we marked between QQQ and IWM that started after the March bank crisis. Its not that tech is simply outpacing other US equity sectors gains, it's that it's the only thing that's going up."

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