Wednesday, July 1st. - Stock Trends, Charts, and Commentary
In May, the rally was still going strong.
In the beginning of June, the rally continued and it brought the market indexes to higher levels.
Is there a possible problem that investors are not seeing?
Yes ... the market strength has been getting weaker since May. In fact, when you look at our C-RSI levels (zero based Relative Strength Indicator), you can clearly see that the S&P 500's Relative Strength has been moving lower and lower.
Not just lower, but making lower tops and lower bottoms ... a definition of a downtrend. The market's rally isn't dead yet, because the C-RSI is still positive. But ... unless this down trend in the Relative Strength changes into an up trend fairly soon, the market will find itself in a correction.
Many analysts are counting on Earning Announcements for the 2nd. Quarter to be positive and push the market up. Right now, our C-RSI charts are saying that the market is "cautiously concerned" about the possibility of disappointing earnings. (For more information on the C-RSI please see this link: An explanation of the C-RSI.)
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