Did Thursday Change Anything? Well, There's a Twist in the Tale
What happened that got the market back to the top of the range? Here's what changed and why, including on the Nasdaq. Plus my view on February seasonality, Chinese stocks and more.
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The Market
You see what happened?
We got one little bit of positive indicator movement for the market and there it went. Right back to the top of the range!
But Thursday has a twist. Just a small one. The same way I noted this morning that the equity put/call ratio had tagged its highest reading since the final day of January, I can tell you that the put/call ratio (total) chimed in at 0.94 Thursday. That is the highest reading in a month!
Why the change? Oh I can speculate, but I shouldn’t. I would point out that we haven’t had a green Friday in a month and we’re at the top of the range so it makes sense that folks are betting on the pattern, doesn’t it?
The real question is if Thursday changed anything. Well the NYSE did not see much change in any of the indicators. The new highs increased but are still below where they were as we headed into the month.
The Nasdaq, though, did see an increase beyond those late January highs. Sure, we’re far off from the highs since in the fall, so if we do see a new high in the Nasdaq I will probably start complaining almost immediately about new highs. But for now, it gets credit.
Anecdotally, I will also note that even those normally bullish are thinking that the seasonals for the end of February are bad. Of course they thought the seasonals for early February were good, so I guess we can flip that coin.
I would love to see us break out and see what’s up there. I fear we will not.
New Ideas
I want to correct something I said the other day when we looked at Alibaba BABA. I made the comment that the other Chinese stocks weren’t acting the same. They aren’t, but I am still of the mind that KraneShares CSI China Internet ETF KWEB ought to get through this resistance but it could use a pullback first. I did not want you to think I was bearish on the Chinese stocks.
Today’s Indicator
The 10-day moving average of the put/call ratio has been moving up in the last week or so. I wouldn’t call this bullish but at least all that call buying has come off the boil in the short term.
Q&A/Reader’s Feedback
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As someone who likes to find bottoms I am drawn to Elanco Animal Health ELAN, but it is grasping at straws to call it a bottom, especially in this market. A plunge under $11 and you’re wrong but I’m not sure it has the oomph to get over that downtrend line. Worth a try but I’d keep a short leash on it.
Sezzle (SEZL) is an interesting chart because it has corrected and then scooped under. The only issue is that it has some short-term resistance here. Would like to see it chop some more and then breakout. Please be aware this is a very small-cap stock so it trades thinly.
Radware RDWR is so thin and has just run up on a seven-day winning streak. Some consolidation here before a breakout would be helpful but look at all those spikes, that is how thinly it trades.
Futu Holdings FUTU broke out but it is in the process of filling that gap from October, which makes it hard for me to get on board. It has a measured target around $135 but I think that high from October is going to be resistance the first time up.
The best news I can offer on Boston Beer SAM is that it met its downside target when it got under $230 this week (target was $220-230). Now it will need to start some up--and-down action before it can show us it is interested in holding. Maybe the price is right but that’s the best I can say now.
We looked at Airbnb ABNB a few months ago and I sort of liked it because it had that basing look. And then it did absolutely nothing but leak lower and sit there. The fact that it crossed that downtrend line is a plus for me. It has resistance all the way up so there is no clear breakout, but I would say I don’t want to see it back under that downtrend line (which will get further away the further out in time we go so it’s probably not useful). If it can’t get going soon I’d worry.
