Excerpt from Brett Steenbarger’s
Indicator Review for June 2nd.
"Last week’s indicator review noted weakness across many of the measures in the wake of a several-day pullback. We’ve since bounced from those price lows, but remain well off the highs across most of the indicators. Money flows to the S&P 500 stocks continue to be weak, with divergences common since April.
…In past indicator reviews, I’ve noted considerable sector rotation and divergence, even within the S&P 500 large-cap universe. This continues at present and appears to be a major reason we’re not seeing more broad-based strength since the January/March market bottom…
All in all, the weakness in TICK and money flows and the relative performance of sectors suggests two things: 1) that more money is shifting from sector to sector than actually entering the stock market; and 2) that when money is entering the market, it is doing so selectively (commodity-based themes, technology). This is not necessarily a prescription for a fresh bear market, but it also is not a solid foundation for a sustained market rally. For this reason, I am being more tactical than long-term strategic in my own trading."
Read entire article here.
