#104: Consumer Sentiment & Bad Breadth

Author

micksonmatch
July 18, 2024

S2N Spotlight

I had a really busy day running around today, so instead of sending something of poor quality I will just provide some observations.

S2N Observations

There was some action in the equity markets yesterday. I saw some headline grabbing stat that $1 trillion of value has been wiped off the Magnificent 7’s scoreboard this week. Of course many trillions have been added prior. I just got used to saying a “milly” it looks like I will be skipping “billy” and going straight to “trilly”.

Yesterday the Nasdaq 100 got a -3% day, you can see in the chart below what streaks of no big drawdowns look like. It had been a while since a -3% down day but nothing like previous streaks.

There is something about the chart below that just doesn’t seem innocent. The Cumulative Advance / Decline index has kissed the S&P 500 index what is seeming to one of those bad breadth kisses.

I notice that the US Dollar Index is looking rather soft. I know that is trading lingo, you can make of it what you wish. There are more trend lines than a railway track, but I think I can see a trend developing.

Finally the University of Michigan Consumer Index has produced a weak reading which is closely associated with previous recessions. I have run out of time to produce a deeper dive on this but I think we should not ignore it.

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