Look Out for a Soft Retail Sales Report...

And for downward revisions to that hot advanced July estimate!

Highlights

• Market breadth is poor and leadership has narrowed as the rally comes under pressure — there is no reason to be adding exposure right now

• The U.S. economy is set to receive a series of negative shocks, collectively pointing to a stall or outright contraction

• Lots of hot air(fare) in the CPI report, as airlines slash their outlooks on rising fuel costs and tepid demand

• The past 11 months of price action reflects a classic bear market rally — valuations, ERP, the yield curve and the economic cycle do not flash bullish signals