Skip to main content

I Spotted Something Curious in the Statistics

Today we got the rally I expected to land yesterday, but let's take a close look at breadth and the transports.

The Market

Today was what I thought we might get yesterday, yet the statistics from today were very curious.

Breadth, for a day the S&P 500 tacked on 36 points, was disappointing at positive 670. It’s not awful, but it really could have been better. Over on Nasdaq, it was negative. But for Nasdaq, I prefer to look at the volume figures and there a mere 56% of the volume was on the upside.

Then there are the stocks making new highs. There were actually even fewer today than yesterday. Nasdaq had 136 new highs today vs. 148 yesterday. And the New York Stock Exchange had 165 vs. 209 yesterday. So, once again, we have a rally in the market that is narrow and new highs can’t get over 200 on either exchange.

Image placeholder title

The best part of the day was that banks, industrials and energy stopped going down and reversed. And the transports were solidly green, even when the market was at the lows in the morning. I continue to think we should focus on the transports, because they really do seem tired of going down. On the sentiment front, the daily sentiment index for bonds is now 88, which reinforces my view that I think bonds can’t go much higher than here right now. The Employment numbers will be out on Friday, so if bonds have a few down days between now and then there would be more room to rally if the employment number is light, but if that doesn’t happen, the bond runway is short now.

The same goes for Nasdaq which has a DSI of 88.

There is a chart going around that shows the seasonality for August is terrible. I think I have seen it at least a dozen or more times and each time I see it I figure there is no way we see the market die in August. Yet, I do not think the rally will come in mega-cap tech. That’s why I am focused on the transports, industrials, financials and energy. Of course we could just continue this chopfest we’ve been in for a month or so.

New Ideas

It is once again time for me to remind you that I am still waiting for Walmart (WMT) - Get Free Report to get going. I feel as though I do this once a week. Yes, there are layers of resistance all the way up but it continues to shape up in my view.

Image placeholder title

Today’s Indicator

The McClellan Summation Index is still sitting there, unable to lift, and at the same time it has stopped going down.

Image placeholder title

Q&A/Reader’s Feedback

Helene welcomes your questions about Top Stocks and her charting strategy and techniques. Please send an email directly to Helene with your questions. However, please remember that TheStreet.com Top Stocks is not intended to provide personalized investment advice. Email Helene here.

Now that Pfizer (PFE) - Get Free Report has finally moved, I was asked when we might expect Bristol Myers (BMY) - Get Free Report to get going. And what the target might be. It’s a different chart. Bristol is much more plodding than PFE. There is a first measured target around $75, so let’s start with that.

Image placeholder title

Las Vegas Sands (LVS) - Get Free Report is closing in on the March 2020 low. There is a measured target down there as well. However, I would expect a bounce to come shortly, because it is so oversold. If it gets to $37-$38, I’d think that’s the spot. Otherwise I suppose it’s a sale on a rally to $45-$47.

Image placeholder title

Could Freeport-McMoRan Inc. (FCX) - Get Free Report be forming a head-and-shoulders bottom? Yes, but it is small. I would sell a rally in that $40 area.

Image placeholder title
High on Tech

High on Tech

Let's check sentiment, why you shouldn't trust any bounce from the producer price index number, and what the heck is up with those put/call ratios?

Bond Relief

Bond Relief

Here's why bonds could use a little respite as they were the only thing to really move today. Also, let's look at sentiment and McDonald's.

Breaking Bank

Breaking Bank

Suddenly everyone noticed the banks are not so hot. Also, let's look at new lows, energy and Exxon, and ... vomiting camels ...

A Rally Last Week? What Rally?

A Rally Last Week? What Rally?

It's almost like what happened last week never happened. Also, let's check the indicators, the overbought reading, energy, transports and ... Tesla.