Weekly Macro Analysis 06.07.24

Air getting thinner?

Overall we have the same Macro Score as last week, but a few components switched.

Most importantly to note, is the bifurcation in the market in breadth and in signal:

Here I am picking apart the CNN Fear and Greed Index:

We have opposing readings in the CNN Fear and Greed Index:

While two components are at Extreme Fear, two other components are at Extreme Greed. This does not happen very often.

The indices are really carried by so few stocks and at the same time the traders are getting increasingly reckless in the options departement.

At some point there will be an inflection point and either price or breadth has to mean revert.

Basic Hypothesis:

Indices might experience a sharp, but short lived correction here, and on the other side of that we might see an increasing market breadth and leadership by a less narrow market.

But maybe that is just what I want to happen.

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