Risk and Breadth Mixed

Stocks start the week in a mixed fashion. Market breadth has been near-term bearish. But the risk indicators that we watch (trend channels and momentum ratios, etc.) favor the bears.

With that said, while bearish sentiment stole the spot light last week, we still have the macro trend to the upside. That action trumps the more recent negative breadth.

At this stage we are saying that the market is still in a risk on phase. Two things that we will watch is the action in the small-caps ($IWM) and high yield bonds ($HYG). This could be bearish for domestically sensitive firms and corporate bonds if they turn negative.  This could further catalyze the bears.

We only have two stocks (generated using TS Scoop Bulls) on our bulls radar. Continue to manage winners and trade with very conservative cash management.

Have a great trading day!