The most closely watched U.S. equity benchmark indexes have celebrated numerous record closes of late, but the broader stock market has not joined in on the fun.
Market breadth is a term describing the number of stocks that are gaining or losing ground during a given period, and can provide investors insight into the broader stock market that are hidden by market-capitalization weighted indexes, like the S&P 500, which places greater emphasis on the most highly valued firms.
“There are some definite warning signs in these indicators,” Mark Newton, president of Newton Advisors told MarketWatch, adding that he has recently changed his medium-term outlook from bullish to neutral and expects a significant pullback in stocks sometime this fall. Craig Johnson, chief market technician at Piper Jaffray, agreed that market internals were flashing warning signs, in a recent note to clients. “Market breadth remains an ongoing concern as evidence suggests there has been a growing divergence between the recent record highs on the SPX and overall participation,” he wrote.
Not true. The Russsell 2000 was up almost 2% today.
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