Market breadth finally improved. Buy in?
Market breadth finally improved. Buy in?
Over recent weeks, the majority of stocks were tanking, except for Big Tech and AI plays — which should probably now be called Super Intelligence plays.
Last week, the major money flows turned bearish on Tech and rotated back into beaten-down sectors: Utilities, Energy, Staples, Discretionary, and Financials.
Our Smart Money tracker registered a bullish impulse on Friday, after the S&P 500 tested its daily EMA 20.
The seasonal weakness of September and October typically turns into strength going into year-end. Equities still fully ignore the risk of rising yields, although our Risk Indicator detects severe stress in investment-grade and high-yield bonds. It is uncommon for stocks to withstand such liquidity pressure for long, but for now price action shows no sign of weakness.
Recent dark pool prints confirm a rotation out of SOXL (3x long semiconductors) into SOXS (3x short semiconductors), and notably into bond ETFs such as TLT and HYG.
