A Giddy Market? Nope, Complacent. (And About That Software ETF...)
Did any of the indicators change? Uh, uh.
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The Market
So we got the down day. And yet breadth on the day on the NYSE was positive. In fact, breadth was pretty much the same as it was yesterday when the S&P was flat on the day. Only today the S&P was down nearly 38 points.
But did any of the indicators change? They did not. The McClellan Summation Index has not turned back up, not for the NYSE (shown below) and not for Nasdaq (using volume).
The number of stocks making new highs has not increased either, nor have the new lows ticked back up to the levels of two weeks ago.
What of sentiment? Well, we saw the five days prior to today with a put/call ratio that refused to go over .90. In fact in the past 11 trading days we have seen a reading over .90 only twice, and one of those days was today, with a reading at .90. I would not call the market giddy; I believe it is still quite complacent.
So what changed today? Well, for the past few weeks I have been talking about the software stocks and the semis and the banks. The latter two not because their charts are poor but because on a relative basis they continue to underperform.
IGV, an ETF to be long software, did finally break under that 107 area (blue line). It has support all the way down. The good support is at that black line (around 102-ish). So what changed today was everyone seemed to finally notice that these groups have not been acting great, that they have stalled out.
What changed today is that all of a sudden everyone sees the group rotation. Yet despite all the group-rotation chatter and the fact that breadth was green all day, it still feels as though it can bounce. But where is it going?
One other minor piece of good news is that the volume in the QQQs topped 50 million shares. If the QQQs can make it down to that uptrend line, I’d look for a short-term bounce (563-565 but rising as time goes on). Note that the QQQs have been red for four straight days, something they haven’t done since April.
Aside from all of that I still think we could use some more shaking up.
New Ideas
Progressive PGR, an insurance stock I recommended recently, hasn’t gone anywhere but the pattern continues to develop. Getting over 255 it still runs into resistance all the way up, but as long as it stays over 240-245 I think it improves.
Today’s Indicator
The McClellan Summation Index is discussed above.
Q&A/Readers' Feedback
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Navitas Semiconductor NVTS hasn’t broken yet but it is starting to look toppy. I would be very careful if this breaks 6.
I am drawn to the chart of Tempus AI TEM in that it is trying to form a base. If it can pull back to that 65 area, I’d take a look at it.
I know biotechs have done better lately (I have liked XBI for a while), but when I look at the individual stocks, I end up walking into land mines. Right now I’d say unless Regeneron REGN can get over 600, I don’t trust it. My guess is it rallies into that area and that’s it.
I suspect that CoreWeave CRWV enjoys a bounce within the next few days — from where is the question because I see no support to speak of — but it’s more about its ability to capture that 100 area. Any rally that fails to do that is not good.
