Was That It? Did Investors Panic Thursday?
Or was it close but no cigar? Let's look at the indicators and see.
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The Market
Did it feel panicky? Not really. It felt more bearish than panicky.
Again, panicky is more than 90% of the volume on the downside, and I know you’ll think I am being picky, but we got 88%. It really needs to feel like there is nowhere to hide, and today, there was much hiding in the staples and utes.
The VIX, though, made its way to 30. Now, at least, it sits poised to get jumpy. Jumpy really is a subjective term, but for me, it has to look as if the chart is breaking out of a base, and if you were a momentum player, you would want to jump on board. So, look at the chart of the VIX: it has the chance to get jumpy in the next few days.
Even the put/call ratio joined in today with the reading at 1.16. This is only the second reading over 1.0 since the market started down seven weeks ago. A few more readings like this and the ten-day moving average should finally get going. Notice for all the chatter about bearishness; it is still well below where it was last summer when it shot up to 1.06. It is currently .94
Even the NAAIM folks got a smidge more cautious. They took their exposure down to 54. It is not extreme, and it is only tallied through Wednesday, but it’s progress.
The number of stocks making new lows soared so there is nothing remotely close to a positive divergence. The Nasdaq Hi-Lo Indicator is at .14 while the NYSE has made its way to .21. Under .15 is oversold for the NYSE.
The QQQs had 68 million shares traded. I would have preferred higher because we had 75 million a month ago. But at least it’s no longer hovering at 40 million.
Finally, the DSI for Nasdaq is now 20 (the S&P is at 22). I know everyone is waiting –not so patiently—for that panic move with the statistics all lined up but today was close but no cigar. If we rally from here, it will be more of what we’ve gotten: rallies that last a few days and get sold.
New Ideas
Someone asked me about Deere DE a few weeks ago, and my inclination was if it could trade sideways, it might be okay. It has come all the way down to support, and my inclination now is to sell it. I think it will break that support before this is over.
Today’s Indicator
The 21-day moving average of the ISE call/put ratio has really stalled in this 1.30 area. It is going to need several readings under 1.0 to knock it down to the point that I can call it bullish.
Q&A/Reader’s Feedback
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Jabil JBL should bounce from that uptrend line or from that 115—ish area that fills the gap but then it runs smack into resistance at 130-135.
Datadog DDOG has to recapture 100 in a hurry or else this will be a new leg down. Look at August. You see the way that whoosh broke to a lower low and snapped back fast. That is what would save DDOG now.
I thought Marvell MRVL would rally to 75, and it could only muster 73 before it fell again. It has support in this 55-ish area from August’s low but it’s hard to imagine a rally going anywhere special. The only thing I can imagine that changes the look of the chart is a gap up over 60 that holds.
I realize few stocks are up today, and Crown Castle CCI is tempting because it is up, but I see resistance at 110-112, so I’d be in favor of selling it.
Lockheed Martin LMT has a lot more work to do if it is going to build a base after this huge decline since October (you see, most stocks peaked in October!). So near term 470-480 is a tough spot. Some back and forth for the next few weeks would improve the chart greatly.
Northrop Grumman NOC is running into some resistance in the 530-540 area. It could just digest by going sideways, but a move back under 510 and we’d be looking at a deeper correction. I’d lean toward taking a few profits here and then just use a stop under 510-ish on the rest.
