Market continues to slide on poor breadth and higher volumes

The US Indexes were all down on Thursday. The VIX was up 1 at 15. The main indexes were; DJIA -0.47%, S&P 500 -0.60% and Nasdaq -0.64% (Mag7 -1.03%). On an equal weighted basis (our measure) the overall market was -1.05% and is now negative 1.6% over the last week. Breadth of 32% (range of 12% to 88% over the last six weeks) highlighted that there were clear winners and losers from the Election result, breadth over the last week is 39%. Volumes were softer than over the last week at 9.5b (the average daily volume over the last year of 8b). 

One day returns as follows - equal weight basis: Mag7 -1.03% (AAPL +1.4%, MSFT +0.4%, TSLA -5.8%), large cap -0.64%, medium cap, -0.96%, small cap -1.01% and micro cap -1.22%.

On a 1 and 2 week equal weight basis respectively; Market -1.6% and +3.2%, Mag7 -0.1% and +8.4%, Large caps -0.9% and +3.3%, Medium cap -1.6% and +4.5%, Small cap -2.1% and +4.7% and finally Micro cap -1.5% and +1.8%. 

Our risk monitor remains in favour of the larger cap stock but Small cap in particular has been very strong over the last 2w and outside of Mag7 they are the best performer. Micro caps have underperformed the market by 1.4% over the two weeks.

Only two sectors were in positive territory yesterday: Energy on the back of Renewables +3.5% and Uranium +1% and Utilities +0.2%, pushed higher by the Water Utilities +1.3%. It is difficult to see any trend in the market yesterday other than general softness. Other than Energy all sectors had poor breadth of advancers and this highlighted the fact that there are pockets of stocks moving, generally based on news flow. For example Consumer Non-Cyclicals was -0.6% but within this Broadcasting was +2.4% following strong numbers from Disney and Advertising was also strong at +1.3%. Technology is the strongest sector over the last 4w but was the third weakest yesterday as FinTech reversed heavily -3.9% and even Software was -1.4%. Other pockets of performance included: Tobacco +3.4%, non-Gold Precious Metals +1.6%, Food & Retail Distribution +1% and looking at our Tags Quantum Computing was +7.8% and Silver +0.8%.

A notable number of 52 week highs was seen in all sectors: Exceptionally high number of 52 week highs in Consumer Cyclicals (across the sector), Financials particularly Banking & Investment Services. Industrials was strong again (across the sector including Transportation... for the second time) and Technology (Software & IT Services, Technology Equipment).

Notable high volumes in all sector: High levels in Basic Materials (Metals & Mining) Consumer Cyclicals (across the sector), Financials (across the sector), Healthcare (across the sector) - this is concerning as it was also the worst performing sector yesterday, Industrials (across the sector) and Technology was very high (Software & IT Services, FinTech and Technology Equipment)