Since the S&P 500 peaked in late January, the behavior of the U.S. stock market has been really fascinating. While some indices -- notably the NDX and the Russell 2000 -- have ascended to all-time highs, the nature of the price action across all of them is generally quite similar.
Essentially, U.S. markets have tended to gap higher on the open, extend those gains for the first half hour of trading ... and then dribble slightly lower over the course of the day before dumping into the close.
Now this probably speaks to the degree in which trading has been dominated by what we might charitably call "political developments" -- i.e. tape bombs coming from Donald Trump, China, Italy, and the like. It certainly looks as if the market is disproportionately inclined to react to "good" news from the overnight session.
Those lousy closes are certainly a concern, the combination of strong openings and weak closes have combined to drive the so-called SMART index precipitously lower. Of course, we found a few months ago that "buy" signals from that index are actually more bearish than "sell" signals ... but generally speaking, it's a healthier market when gains are more evenly distributed across the day.
Encouragingly, that's been the case for the S&P and the Dow since the start of May. The Russell is still notably "early heavy"...yet for the time being it continues to lead the way higher.
Source: Bloomberg Pro Terminal
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