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Tuesday, March 21, 2017 8:46:43 PM
Is The S&P500 Suffering From Short-term Fatigue?
By BCA Research | March 21, 2017
Equities are exhibiting signs of mild fatigue. Breadth has begun to narrow, and new highs have sagged compared with new lows (see chart). Both of these technical developments have warned of previous tactical pullbacks. The recent reset in oil prices may also test investor nerves.
Oil prices have been a critical macro variable, because they influence inflation expectations and the corporate bond market (high yield bond spreads shown inverted, see chart). Crude oil price
corrections have accurately timed equity retreats (see chart), and general risk aversion phases. To be sure, the global economy is no longer on a deflationary precipice, suggesting that weaker oil prices may not foreshadow a soft patch, but they may be a good enough excuse for profit taking in the equity market after a good run.
Contrary to popular perception…
For additional details, please see the U.S. Equity Strategy latest report titled: ”Reading The Market’s Messages”, available at uses.bcaresearch.com.
https://blog.bcaresearch.com/is-the-sp500-suffering-from-short-term-fatigue
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By BCA Research | March 21, 2017
Equities are exhibiting signs of mild fatigue. Breadth has begun to narrow, and new highs have sagged compared with new lows (see chart). Both of these technical developments have warned of previous tactical pullbacks. The recent reset in oil prices may also test investor nerves.
Oil prices have been a critical macro variable, because they influence inflation expectations and the corporate bond market (high yield bond spreads shown inverted, see chart). Crude oil price
corrections have accurately timed equity retreats (see chart), and general risk aversion phases. To be sure, the global economy is no longer on a deflationary precipice, suggesting that weaker oil prices may not foreshadow a soft patch, but they may be a good enough excuse for profit taking in the equity market after a good run.
Contrary to popular perception…
For additional details, please see the U.S. Equity Strategy latest report titled: ”Reading The Market’s Messages”, available at uses.bcaresearch.com.
https://blog.bcaresearch.com/is-the-sp500-suffering-from-short-term-fatigue
• DiscoverGold
Click on "In reply to", for Authors past commentaries
Information posted to this board is not meant to suggest any specific action, but to point out the technical signs that can help our readers make their own specific decisions. Your Due Dilegence is a must!
• DiscoverGold
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