Thursday Midday Color
Here's what's piquing my interest so far on this potential bearish-engulfing day.
Emerging Emerging
Pretty much every study we've looked at for emerging markets since last fall has been bullish, and those markets continue to plug along. The MSCI Emerging Markets Index has now rallied for its 10th consecutive session, the longest in over a year (when trading at a 6-month high, anyway).
While an impressive sign of momentum that tended to continue over the next month, it also showed some hints of being "too much" over longer time frames. Outside of the 2002-03 recovery, those 6-month returns were questionable.
All Growl, No Bite
The latest AAII survey showed that investors looking for a decline dropped to about 20% of the total, which is very low. That has not been a good reason to sell since the financial crisis.
Breadth Review
With mostly muted market moves in recent days, there haven't been any new breadth extremes of note. It's interesting that while a couple of sectors struggle, though, their Cumulative Advance/Decline Lines are hitting new highs.
Like financials.
That has been a relatively good sign.
And energy.
That has been much less of a good sign for that sector, though. Not sure why that might be.
It's also happening in some markets overseas, like in the Nikkei 225.
Like we saw with energy, this kind of supposedly positive divergence has been a curiously poor reason to be a buyer.