Skip to main content

Small-Cap Speculation Strikes Back

Let's inspect the Russell 2000 action and what it means for this either/or market.

The Market

Today surely saw the Russell 2000 rally.

From my vantage point, the rally was concentrated in all the speculative names that topped out in February.

That means a few things. First, it means the breadth statistics, which have not been leading the market for two months, are now leading. That means the McClellan Summation Index is now heading upward. It means the number of stocks making new highs has improved marginally vs. last week. But, at the same time, it means the big-cap stocks that have been doing well for most of April are now taking a back seat. The either/or market remains intact.

For example, the S&P was up, but the Dow, the transports and the utilities were down. The industrials, which had a nice run these last few months, made a high and reversed today.

Image placeholder title

Nasdaq saw 86% of its volume on the upside, which shows you the change in the market. Recall, last Wednesday that reading was 89%. We have not seen readings like that since back in January and February, when speculation was running high.

Speaking of speculation, the put/call ratio was .66, which is the highest since Feb. 22. So you can see that’s where we are now with speculative issues and tech back in the lead and most everything else correcting or chopping.

New Ideas

With everyone talking about inflation, these days I was asked about Freeport McMoRan (FCX) - Get Free Report. A breakout from here would measure to the upper $40s.

Image placeholder title

I do want to bring your attention the chart of Invesco DB US Dollar Index Bullish Fund (UUP) - Get Free Report. It is getting mighty oversold. Any move into the $24.30-$24.40 area would be into good support. The DSI for the Dollar Index is $26 now, so it is on my watch list.

Image placeholder title

Today’s Indicator

The 30-day moving average of the advance/decline line is not oversold.

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.

Inovio Pharmaceuticals (INO:Nasdaq) broke down so I’d be a seller on a rally into that $8 area. What would change my mind is if it can gap up over $8 leaving this as an island down below.

Image placeholder title

Ambev (ABEV) - Get Free Report has a decent amount of resistance overhead, so I can think of better charts out there. If you want to buy, then a dip near $2.80 seems like the right place, because if it breaks that line then you know you’re wrong.

Image placeholder title

Nvidia (NVDA:Nasdaq) is similar to the Adobe (ADBE:Nasdaq) chart I viewed with a positive eye this weekend. It had a fake break at the lows and then rallied to new highs, pulled back to support and is trying to rally again. So as long as it stays over $575-ish it gets the benefit of the doubt.

Image placeholder title

Skyworks Solutions (SWKS:Nasdaq) finally broke out and I was asked for a target. It measures to $210-ish, but be aware, earnings are out on Thursday.

Image placeholder title

CRISPR Therapeutics (CRSP:Nasdaq) seems to be trying to bottom. Since I like the biotech stocks I’d be in favor of this chart, which if it breaks out would measure to around $150. As a side note, I am currently reading "Code Breaker" by Walter Isaacson, which is all about the folks who discovered CRSPR technology; it’s a fascinating read.

Image placeholder title

I struggle with charts like Health Catalyst (HCAT:Nasdaq), because they have moved up so much already and are at the highs. But as long as it stays over around $54, it should work its way to the low $60s.

Image placeholder title
Dow is the Most Vulnerable to Profit Taking

Dow is the Most Vulnerable to Profit Taking

Despite the newfound focus on the Dow Jones Industrial Average last week, it turns out we may be seeing the last gasp of outperformance here.

How Hungry Is This Market?

How Hungry Is This Market?

Here's what I'd like to see happen with this rally -- I'd like it to show some FAANGs. Here's why -- and a look at Microsoft's chart, news highs and more.

Sloppy With a Chance of Rallying

Sloppy With a Chance of Rallying

Here's why I see another rally before the weekend, even amid the messiness, and a bump for Amazon.

Sloppy With a Chance of Rallying

We Can Rally Just a Bit More

Energy stocks have a lot of complacency in them.