After failing to expand, new highs are now struggling to stay above new lows. As we discuss in this week’s Market Notes, if that continues then the recent rise bond yields becomes a more acute risk for equities.
Volatility comes at a time when investors have fully embraced equities. In our Weekly Chart Pack we discuss sentiment and the expected test of bull market behavior. The unanswerable question at this point is whether testing leads to broad deterioration. For now the strength that emerged over the past two months gets the benefit of the doubt, though perhaps not a long leash.