This market sucks!

The SPX has made new highs. Rejoice, right? Well, all other signs point to a market that, well, sucks.

Sentiment getting exuberant

The only item that drove the recent headline US consumer confidence survey higher in May was the stock market. Sentiment is record bullish! Which, actually, sucks.

It wasn’t hopes for better business conditions- they suck!

 

Buffett holding record cash.

Hey, if the worlds greatest value investor can’t find anything of value to buy right now….That kinda sucks!

Crowded trade

Gee…Wonder why Warren isn’t buying more into the Mag-7 AI stocks. See my recent blog: Is AI a bubble? – ValueTrend

31% of the SPX relies on 7 stocks. This is one crowded trade. And that sucks!

Market breadth sucks lately

Market breadth is a sign of market health. Not enough broad participation means a focused concentration on a few stocks (like, say, 7..?) subject to vulnerability.

NYSE Advance/Decline vs the SPX – the recent divergence sucks

Dow Industrials vs. Transports confirmation failure. Breadth sucks!

New Highs vs. New lows diverging (falling) despite new highs on SPX. Sucks!

% of stocks over their 50 day SMA’s (and also over their 200 day SMA’s not shown) falling despite new highs on SPX. This sucks!

Not to mention that pesky momentum divergence problem…which also sucks

Conclusion

This market sucks! According to the above factors, anyhow. We raised a bit more cash the other day. We continue to focus on some stocks…like gold stocks. We like gold bullion, but we also like gold mining stocks. We have reduced our base metals a bit, and are holding our positions in Canadian oil stocks, and value stocks. Plus cash. So there you have it: gold stocks, gold mining stocks, Canadian oil stocks, and value plays. That, and cash. That’s our view.

Happy trading!

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