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Bank of America Merrill Lynch’s ace professional Stephen Suttmeier is out with his big regular monthly chart book this weekend break as well as he leads off with a pair worthwhile of our attention.

The number of S&P 500 52-week lows that have actually stacked up right here at the middle of 2015 is not a good idea. The market has been able to shrug off bunches of internal breadth problems over the last couple of years, however this could possibly be a huge enough problem to do irreversible damages to the breakthrough. The major standard has currently been stalling for over half a year while the constituent stocks have been dropping to brand-new year-lows one by one.

The tally now stands at 42 and also counting. It’s hard to make a significant brand-new high in the index when 10 % of the business consisted of are losing precipitously.

Suttmeier notes in the future that a whole lot of the weak point is focused in power, materials and industrials – which is easy to understand offered the commodities/ emerging markets photo this days. On the side of the bulls is that financials are building in strength family member to the total S&P 500.

The 2011 contrast is an interesting one …

Chart 1: Expansion in 52-week lows allows breadth problem for the S&P 500 The expansion in the variety of S&P 500 stocks striking new 52-week lows as the S&P 500 has traded within its range from late February is a precaution from market breadth and also recommends that 2120-2135 resistance needs to hold. Secret support for the S&P 500 remains 2040, yet reducing breadth is a risk for this support.

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Chart 2: This rise in brand-new 52-week lows corresponds to summertime 2011 The mid 2015 build-up of new 52-week lows within the S&P 500 corresponds to the mid-2011 increase in new 52-week lows. The 2011 build-up in new 52-week lows came before a breakdown from a top in the S&P 500 and an optimal to canal decline of 19.4 % on an everyday closing basis (21.6 % on an intra-day basis) right into October 2011. Difference is that over 40 stocks in the S&P 500 have hit new 52-week lows currently vs. under 20 prior to the August 2011 S&P 500 break down, meaning that the configuration could be much more bearish currently than in 2011.

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Monthly Chart Portfolio of Global Markets: S&P 500 cyclical bull market at risk
Bank of America Merrill Lynch – July 24th 2015