This One Day Wonder Raised Our Caution Flag Immediately

CAMS Weekly View from the Corner – Week ending 9/11/2020

September 14, 2020

Very interestingly, late last week we observed behaviors that may be offering the much broader stock market may want to kick into gear.  This is a very early observation that can disappear as quickly as it appeared. Weekly View Excerpt – August 31, 2020 Edition In recent editions of these Weekly Views we have been focused on the general health of the stock market via its lack of broad participation.  Stated more specifically, our on-going observation point has been that a select list of companies has been the primary driver of stock market gains – particularly in the summer months. Historically speaking, this can go on far longer than most would believe and yet, as a general market observation, such a backdrop does not reflect good overall health in light of such characteristics. In depicting this disparity we have been highlighting the year-to-date returns chart for the weighted and equal weighted S&P 500 indices. The weighted version, with select companies impacting the performance more than others, has handily outperformed the equal weighted version which by its construction places all 500 companies on an equal weighting resulting in them having the same impact on the performance. Our header excerpt at the top of this edition takes us right where we left off in our previous edition.  In that Weekly View we were sharing how the market was showing some signs of wanting to broaden out and to kick into gear. It did just that – for about a day and then failed – not good. With this we immediately raised our caution flag and began to move toward safer waters with our various portfolios.