At This Point in the Rally, the Meme Stocks Are Getting Attention
A meme stock traded 20% of today's Nasdaq volume. That's rarely a good sign.
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The Market
Don’t you just wish the market would fall a few percent or rally a few percent? I do. Because what we have now is a grind where most stocks are doing nothing.
Let’s talk about OPEN, a stock that has become a meme stock. I could go on about what it does, but the first thing to know is it was a SPAC, and a week ago it was a penny stock. Now it is just over three bucks, but during the day it tagged five bucks.
Oh, and it traded almost two billion shares today. That means it was just shy of 20% of the volume on Nasdaq. This is not normal activity for a stock market. Or shouldn’t be.
The indicators did not change much during today’s session. What strikes me is that Nasdaq is up six straight days while the Transports have been red for six of the last seven days. Perhaps that will reverse tomorrow, since it seems as soon as we see some weakness in an area, it is time to bounce it.
I’ll give you the bullish side since you can probably already cite the cautionary ones. The put/call ratio was .90 today. That is the highest reading and first one over .90 since July 7th. This basically confirms what I heard on television most of the day: everyone thinks the market should pull back.
Everyone thinks said pullback will be a buying opportunity. I have seen many with the standard view of a 5-7% pullback. The one thing I know is that we either don’t pull back or we pull back much more than that.
I would prefer a pullback because the charts really feel tired, and a reset is generally a positive.
New Ideas
A few weeks ago, I thought Berkshire Hathaway BRK.B should rally from this area (480-ish). It did not hold and broke the line. Yet I still thought it should recapture the black line. Thus far, it cannot, but I cannot shake my view that it should rally.
Today’s Indicator
The 30-day moving average of the advance/decline line is overbought.
Q&A/Reader’s Feedback
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JP Morgan JPM hasn’t done great since earnings were announced, but it hasn’t fallen apart either. A correction into that 270-280 area would help the chart.
I was asked to follow up on Norwegian Cruise Line NCLH, which I liked a few months ago. It’s a bit over-extended in the near term but the target is around 25.
Dave & Buster’s PLAY filled the gap from December and is now spending its time correcting. If it can go sideways for the next month or so, eventually tagging that uptrend line that might get me interested again. I figure the uptrend line should come in around 28-ish a month from now.
