Last week, I highlighted the ratio between the S&P 500 Equal Weight Index (SPXEW) and the S&P 500 Index (SPX). In that post I mentioned that a move below its 20 week moving average usually means a choppy market as money moves out of large cap stocks and into mega caps. This week, the ratio recovered. That suggests that SPX will make another attempt at a new high. Keep an eye on this indicator because a move back below the line should signal a failure and suggest we’re headed back to a choppy market at the least.

My core market health indicators bounced around a bit, but my measures of market strength and quality fell further. This isn’t a good sign during a small consolidation. I prefer to see them strengthen.

Conclusion

Weakness in my core indicators, but strength in the ratio between SPXEW and SPX. It feels like the market wants to make another attempt at new highs, but doesn’t have the technical underpinnings to succeed.