Time To Become More Cautious?

Despite the tendency to moan and whinge about the Australian share market, it has to be pointed out local equities are outperforming their US peers for the first seven months of 2015 thanks to a 4% rise plus 2%+ in average dividends. However, look beneath the surface of index performances and not everything appears to be in healthy shape. This is in particular the case in the US and in Emerging Markets where an ever smaller number of stocks is pushing up indices this year, while an ever larger percentage of stocks is trending lower. Clearly, this does not look like a healthy bull market. In Australia, more than half of ASX200 constituents are delivering positive return so far this calendar year. The problem is nine of the Top 11 large cap stocks are not. This raises the question whether market leaders CBA and BHP are still relevant? If so, are they leading the rest of the pack? If the answer is yes, this could spell bad news ahead (VIEW LINK)