Special Risk Capital Management LLC

Market Remains at a Crossroad July 3, 2020

July 2, 2020 – This will be short since it’s a holiday weekend in the US.

My “Bearish Indicator” (Cumulative Up/Dow Volume) almost went Bearish last week; very, very close, then recovered a bit. In the chart below we see the Money Flow is Bearish but the remaining ones are still positive / Bullish. So be it.

I’ve moved important price support levels up as shown. The low volume this week is not unusual since it was a shortened holiday in the US, so I’m not reading much into that. Thursday (last day) was a weak bar, so Monday and all of next week may be interesting.

I’m seeing the market leadership narrow right now. The indexes are primarily being driven by the large cap technology issues and the rest of the stocks are just in a holding pattern. Shown below is pie charts representing the 1500 stocks in the very broad S&P 1500 Index. (sections are % of total)

Price Strength (20 day) –

Those in Accumulation / Distribution –

Note how the green areas are shrinking compared to the red. Smaller number of stocks are leading; usually a Bearish sign. Caution.

Short Term Sector Strength –

Strength continues in the technology sectors. At this point I remain concerned but invested. Bad news will effect this market and that could happen very quickly.

For those in the US, Happy 4th of July. To all . . . have a good week. … Tom …

Price chart by MetaStock; pie chart & table by http://www.HighGrowthStock.com. Used with permission.