1 - SITUATIONAL ANALYSIS
SENTIMENT "ADJUSTING"!
Last week with the Fear & Greed Index down to a reading of 61 we said: "We have seen some degree of market weakness over the last week as the S&P 500 tested the 21 DMA for support. It appears that increasing numbers of investors are nervous about some degree of pullback after a historic run-up without any real corrective consolidation.
The Fear & Greed Index reflects this as it has lowered quite noticeably though registering a Greed reading."
This week we see the Fear & Greed index down to 46, a neutral reading and the S&P 500 lower at its 50 DMA level.
As we pointed out in Wednesday's subscriber's mid-week charts update, the CPI, PPI and Bond Auctions (historic "tails") shock the markets with a reignited worry about Inflation. The long expected June Rate cuts have been abruptly taken off the table and the markets are adjusting to it.
EQUITY FUND OUTFLOWS PICK-UP STEAM
The chart below shows that weekly Equity Funds Flows turned negative following steady weakness over the past couple of weeks. The chart to the right shows that even the US Large Cap funds saw impressive outflows. This is what initially has taken the S&P 500 to the 50 DMA.
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