From Chief Investment Officer Tom Veale,
“This week’s report follows up on seeing a deterioration in market breadth as declining stocks outpaced advancers by over 2:1. Further the number of New 52 Week Lows increased rapidly in last week’s trading. This moved our Divergence Index high into its neutral range from its previously bullish stance. The other three components of our Market Risk Indicator remain bearish and the MRI overall rose another point to 44, an all-time high since January of 1982. The MRI Oscillator shows mild upward risk pressure at +3.
The markets sloshed around like bilge water in an overburdened freighter in heavy seas for most of last week. Even so, the indexes didn’t fall much as most sectors backed off a little. While the markets seem over-due for a consolidation, new investing elements may change the appearance and duration of any correction we have. Many economic data seem to indicate recovery is still under way and quite strong. However, it’s still “recovery” and not new advancements for much of the economy. “