Highlights
- The ST Risk Gauge improved from 7 to 5 as the market became less oversold, but the repair was driven by defensive groups rather than cyclical leadership.
- Cyclical leadership groups remain broadly oversold, with little evidence of widespread participation in the recent market improvement.
- While we still expect rallies from oversold groups with the LT gauge still in 'Risk On', deteriorating cyclical leadership and defensive outperformance have us looking for shorts into resistance, barring significant improvement in breadth and trend.
