Talking Points – June 2021

June 16, 2021 – Market Internals Showing Some Signs of Weakness

The S&P 500 continues to trade at or near new highs. However, less stocks are themselves trading with strength. This can be represented in various ways, but today we look at a chart showing the percent of stocks over their 50-day moving average. It has been deteriorating in recent weeks.

Source: Strategas Research

This is not uncommon as we approach the typically weaker seasonal period starting in mid-July. Markets have been internally rotating for months now and investor sentiment is on the high end. A normal correction, or even just an extended period of pause over the summer would be a healthy reset, if it were to occur.

Source: Greg Towner, CFA, CMT