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Tom Lee reposted this post on his X account today and it kind of surprised me because this is a post from Jason goer that says this is not a healthy Market the NASDAQ Composite scored another new high on Monday but fewer than 40% of stocks Advanced and there were more new lows than new highs it joins only a few other sickly markets as precedents you can see this happened in 1999 you were actually higher 6 months later about 9% and 12 months later your higher 64% but that's the only positive instance of this event happening this has happened a few times in the past in 1999 you were higher by about 99.1% 6 months later but in 2015 you were down 14.2% 6 months later after the signal signaled and then you had two days back to back in 2021 November 18th and November 19th that this happened and you were down about 29% 6 months later and this has now occurred on June 13th June 14th and on July 1st but again it really surprised me that that Tom Lee shared this and seemingly is agreeing with Jason here and Tom Lee's been pretty dang bullish on this market for a long time but he's pretty much saying markets look sick here and and this could be a little bit of a shift from Tom Lee you have a new strategist on Wall Street today this time from B Riley Securities that says stocks could fall 50% when the recession comes and when the stock market bubble finally pops this follows JP Morgan BCA research and now B Riley Securities but we actually had some good news today for markets a little bit of a push back for that recession call and it came to us via the jolts job openings now last month's job openings were revised from 8.05 million down to 7.91 million so that was less job openings last month than we thought but for this month you came in at 8.14 million you were expecting 7.9 million well why is this good news isn't job openings falling good news and that's not true but that is the common narrative that you hear from Wall Street guys it's actually good news to see more job openings because if you're a company a business if you're looking to hire more you're probably doing okay so more jobs that need to be filled means likely a stronger economy we also had the economic optimism index that came in at 44.2 you were expecting around 41 so that was also a nice Improvement today and according to Seth golden on X this is the best ever us election year since 1950 for the S&P 500 00 when the SPX has gained between 13 and 70% in the first 17% in the first half it has always been positive in the second half the worst second half return was 3% in 1976 or that would be roughly the S&P at 5,675 by the end of the year the great Maris on X says S&P 500 watch carefully there is an elegant Rising wedge in play he says she's beautiful and that's certainly what looks like again if you do break this lower end um line that's where you could get more downside I know JP Morgan is called for this I know a lot of other technicians have have pointed this out but again you would still need a a a pretty decent fall from here to get that break you'd have to see the S&P fall to at least 535 or so on the spy and right now it just seems like the markets don't want to fall this has been a brutal stretch for us small caps the Russell 2000 Heads for the worst first half to a year in history this is relative to the S&P 500 so in no other point in time have you had the S&P up so much and small caps underperformed by so much at least for the first half of a year so I think that makes it even more obvious what's going to happen in the second half of this year is either S&P is going to fall or small caps are going to rise pretty simple and here is a great chart just to show the Divergence here you have these small caps that are actually down about 1 1 12% so far at midpoint of this year and the S&P that's up 15% that's almost a 177% underperformance of small caps relative to the S&P as Zero Hedge points out all the job openings were for government jobs the monthly increase in government job openings was the second highest on record so yes it does look like government job are inflating the numbers at least momentarily Tom McKellan on X says a stock making new lows is one of the steps on its way to delisting the number of NASDAQ issues trading each day is reported in Barons and Wall Street Journal and it it has been declining even though the the NASDAQ Composite keeps Rising we saw this dynamic in the late '90s it took a while but it did matter and you've you've seen that happen for a while now Jerome po will also had a speech today at 9:30 in the morning and these are some of the highlights of what he said he says quote most people think we're not going back to the ultra low rates of the recent past but nobody really knows Jerome Powell says inflation may get back to 2% late next year or early the following year how says the budget deficit is very large and the deficit path is unsustainable this does come after the US debt just Rose $109 billion in one day Jerome Powell says the trend of disinflation appears to be resuming he also says 4% unemployment is still a very low unemployment rate citing he can't remember it being that low since his teenager years and he says moving moving to fast creates a risk of inflation returning and the FED needs more data before cutting rates can begin it's also being reported that only 24% of stocks in the S&P 500 outperform the index year today marking the third narrowest 6-month period in history since 1986 according to Bank of America and you can see that represented here in this chart this is a record low of stocks that are outperforming the S&P 500 currently only sitting at about 25% someone responds to this and says bullish imagine when the other 493 stocks go up and that's exactly it that will be very bullish when and if that happens as long as that actually does happen and it will depend what you know transpires in the economy and what is going on with the fed the FED actually Engineers a recession then yeah markets are going to have a long way to Fall From Here If the Fed can start to cut rates soon enough before things do start to break then things are going to do just fine and there will be a broadening out of our markets Nick Tim widely seen as the fed's mouthpiece uh he he writes an X to quote Powell he says inflation now shows signs of resuming its disinflationary Trend we are getting back on a disinflationary path and we've made a lot of progress September cut question mark Powell responds I'm not going to be landing on any specific dates here today Powell also dismisses the focus on core Services excluding housing in favor of focusing on the labor market he says quote you can see the labor market is cooling off appropriately so and we're watching it very carefully indeed it looks like you're doing just what you would want it to do we do have the ADP employment change that comes out tomorrow morning at 8:15 in the morning you're expecting 100,000 private jobs were added and then we're closed on Thursday so we're not going to get any data Thursday and then on Friday you have your non-farm payrolls and your unemployment rate D Powell said today that he believes the unemployment rate can stay roughly around 4% so we'll see you've already risen from 3.4% to 4% that is usually an inflection point for the unemployment rate typically if we're going into a recession or slowdown which it looks like we're at least going into a Slowdown at this point once you get that 0.6 percentage Point rise in the unemployment rate it starts to speed up a little bit so we'll see if we indeed due rise coming on the Friday's unemployment rate I should also mention tomorrow we are going to have ISM Services PMI that will also be very important You're Expecting 53.5 for that number last month's number was 53.8 so expecting a little bit of a cool down there business activity expected to cool a little bit down to 61 ISM services employment expected to cool a little bit from 47.1 to 47 ISM services new orders are expected to do the same cool a little bit from 54.1 to 54 and ISM Services prices are expected to cool down a little bit as well from 58.1 last month to 57.8 so you are expecting a little bit of a cooldown on your ISM Services PMI but really not expecting drastic changes either the most important component of this will be the prices paid component because that tells you uh at least what the inflationary pressures look like in that service sector you will also get initial jobless claims expecting those at about 235,000 and recently they have started to ramp up a little bit last week's number was moved downwards slightly um but you are expecting that to resume in an upwards Trend um coming tomorrow morning as well so definitely want to be watching that also lizanne Saunders on X says rolling one-year correlation between changes in the Russell 2000 and the 10year treasury yield has fallen to the lowest since late 1997 now as this chart shows anytime you are up over 10% for the first half of the year for the S&P 500 you do tend to be positive about 82.6% of the time in the second half of the year as well with a median return of 99.8% and an average return of 10.9% fedon Powell also said today I don't want to miss this that if the labor market unexpectedly weakens that would also cause us to react over on stock twits today's sentiment for the Spy is neutral at 45 yesterday it was bullish at 68 message volume is at 56 which is high today yesterday it was normal at 45 and the participation ratio is normal at 54 option activity today in the Spy ETF expiring by this Friday you can see interest is 25.4 4% calls 74.5 6% puts that means there's about three times as many puts than calls for this Friday's expiration volume today is about 47% calls and 53% puts which is closer to about a 1:1 ratio today is actually up 0.88% so 0.88% of stocks almost 1% of stocks are breaking above their 50-day moving average today so this is not like a huge positive day for markets but it's definitely better than not you can see the NASDAQ is up 0.46% S&P is up 0.23% the Russell 2000 just went negative down 0.05% and the Dow is also down the same the vix is is - 2.3% and overall it's a pretty mixed day today some things are doing well some things are not it's really just hit or miss and that's really because I think the markets are waiting for more data and new information from the rest of the data that we get throughout this week
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