In today’s briefing:
- Take Some Chips Off the Table
- Buy or Fade the Breadth Thrust?
Take Some Chips Off the Table
- The latest risk-on episode has the markings of a bear market rally.
- Investment-Oriented accounts should be cautiously positioned in order to minimize risk.
- If trading accounts are bullish, consider beginning to reduce risk by decreasing equity exposure.
Buy or Fade the Breadth Thrust?
- Zweig Breadth Thrust signals are rare. The book described 14 signals since 1945. The average gain following these 14 thrusts was 24.6% within 11 months.
- The market surge in late May just missed generating a ZBT signal, but some analysts concluded that they are just as good as the classic ZBT signal.
- Traders should fade the recent episode of positive equity price momentum. Past breadth thrust signals have fizzled when the Fed is undergoing a hiking cycle.
Before it’s here, it’s on Smartkarma
