Price Strength Defies Macro Headwinds

Cyclical Weight of The Evidence Argues For Caution

Key Takeaway: Improving rally participation has helped turn the Breadth dial bullish. This is offset by the Sentiment dial turning bearish as optimism becomes more widespread and excessive. Overall, the weight of the evidence argues that risks outweigh opportunity. This is despite continued strength from a price trend perspective. Excessive optimism at a time of unabated macro headwinds argues in favor of consolidation rather than further sustained strength.

Breadth moved to the opportunity side of the scales in July but this was offset by Sentiment now being counted among the risks.

Read More: Market Insights subscribers can download the July Weight of the Evidence report.