Mid-week market update: Is this market starting a new bear leg? There are numerous signs that may be happening. The SPX violated the trend line of a rising channel while the stochastic recycled from an overbought reading, which is a sell signal. The chart of the equal weighted index, which filters out the effects of heavyweight leadership, looks worse as that index tests a key support level.
The market's narrow leadership is evidenced by the concentration of the current leadership of technology, healthcare, and communication services, which is nearing the highs set during the Tech Bubble.
Narrow leadership and high concentration are high risk "this will not end well conditions". Could the latest pullback be the bearish trigger?
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