“The Market’s In Conflict” – 11 Red Flags In A Sea Of Green

Having tagged last Thursday’s intraday highs, S&P futures are fading this morning (for now)…

but, as Bloomberg notes, U.S. stock-market internals are exhibiting conflicting signs as the rally in the S&P 500 Index approaches 10% from the low reached after Brexit.

Just 5 percent of companies in the benchmark have rallied far and fast enough to breach a level analysts deem “overbought,” versus the average 15 percent in comparable rallies, data compiled by Bloomberg show.

At the same time, the gauge’s 10-day moving average is 5 percent higher than its 200-day mean, the widest gap in more than a year.

And as Seabreeze Partners’ Doug Kass notes, the market is like the Energizer Bunny these days – it seems to keep going and going and going, but some concerning signposts are emerging in between the market’s breadth thrusts and new all-time highs. Consider these data points…

The McClellan Summation Index
This important intermediate-term momentum indicator has reached its second-highest reading in a decade.

While high readings of this index can represent strength, the decade’s highest reading came during the week of May 21, 2013 — and preceded a 6% S&P 500 correction.

The CBOE Put/Call Ratio
The 10-day CBOE put/call ratio hit 0.84 yesterday, matching a two-year low at 0.84.

The 200-Day Moving Averages
The S&P 500 has yet to show more stocks over their 200-day moving averages than it did in April and June.

A Less-Than-Triumphant Tuesday
The Dow Jones Industrial Average was the only major index to close with a gain yesterday.

The Strong Dollar
The U.S. dollar index rose to a four-month recovery high of 97.1 yesterday, which will pressure multinationals:

Not-So-Slick Oil Prices
Crude oil is now at about $44 a barrel, $6 to $7 off of its recent highs.

Bullish Bloggers
Financial-blogger sentiment is the most bullish since 2012:

Source: Helene Meisler

Greedy investors
The CNNMoney Fear & Greed Index is flashing “froth”:

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And finally, rate-hikes are back on the table…

But apart from that, everything is awesome.