Trading Action Continues to Be Choppy, While Speculators Head for the Door
Stocks have gone nowhere since the election. And that's got speculators thinking that the easy gains might be over.
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The Market
Note: With Thursday being an unscheduled market holiday due to the death of Jimmy Carter, there will not be an edition of Top Stocks tomorrow evening. I will resume again on Sunday evening.
Someone noted to me that today was a chop-fest. Might I suggest the last two months have been a chopfest for the S&P? The S&P is essentially trading where it was the morning after the election.
In that time, we have seen speculation run amok and we have seen the majority of stocks fall by decent percentages. However, since December 18th, when the FOMC supposedly changed everyone’s view, the majority of stocks have chopped about with one or two days up and one or two days down. The only trend is sideways.
But today saw some of that speculation removed from the market. Some folks will point their fingers at the Quantum computing stocks, but I would just note that Nasdaq had 30% of the volume on the upside, which turns out to be the worst day for net volume since early September. Whatever it was, it needed to happen.
We also saw the put/call ratio stay somewhat elevated, with a reading of .95 today. So, maybe folks are finally starting to feel a bit more cautious than they were just a few days ago.
And then there are bonds. The DSI stayed the same at 10 but boy did folks seem to notice interest rates today. It might have been a Realization Day, you know when we have been trending in one direction relentlessly but all of a sudden folks feel it matters, all of a sudden they see it and say, well, hey, wait a minute.
I saw at least three articles on Bloomberg discussing rates at 5% or all these options that had been purchased, targeting 5%. So, something finally moved folks to take notice. I don’t know if today was the day for bonds, especially with the Employment number out on Friday, but I think we are close to the area now that says ‘enough’.
New Ideas
United Parcel Service UPS is a chart I keep trying to warm up to and each time it spits me out. But despite the move in oil in the last few weeks it has made a higher low and keeps coming back.
Today’s Indicator
The Volume Indicator is back at 46%. Yes, that is oversold; I would still like to see a few more downside days to change sentiment and get the numbers more lined up.
Q&A/Reader’s Feedback
I had not realized how poorly Blackrock BLK had done since most financials have held up. It broke down from a small head and shoulders top that now measures to 925-ish. There is light support here at 975 but I’d lean toward selling a rally in the 1000-1010 area. I would consider myself wrong if the stock can get back over 1025.
Crowdstrike CRWD has spent the last two months churning around at a lower high (than last summer). It’s got a minor head and shoulders top so a break of 340 should be honored. The interesting thing is that the top, should it break, measures to that gap fill from November, just under 320-ish. If you want to buy it, that’s your stop.
I was a big fan of Palo Alto Networks PANW starting last April when it retested that February low. But a few months ago, it started acting sloppy, and I decided it was time to put in a stop, which it broke. It is bouncing off support today, and it looks quite oversold, but if I had to guess, whatever bounce it gets will come back down for a retest (as February’s spill retested in April).
