It was a terrific breadth day, but the S&P 500 lagged. The last three Mondays we have had vaccine news. Pfizer’s (PFE) - Get Free Report vaccine gave the S&P 41 points. Moderna’s (MRNA:Nasdaq) vaccine news gave the S&P 41 points. AstraZeneca’s (AZN:Nasdaq) vaccine news gave us 20 points.
Some would say we are getting lower highs or diminishing returns on vaccine news. I would say it is likely more a function of each time we get vaccine news, the market sells or doesn’t bother buying the big-cap tech stocks, and they still "own" the indexes. This means we remain in an either/or market.
The real news, at least for me, was that I fully expected the Daily Sentiment Index (DSI) for the Volatility index to fall if we saw the S&P rally. The VIX was down, but failed to really break. Similar to the S&P, it just remains clinging to support. Anyway, the DSI went up, to 13. I am baffled by this.
Yet, the put/call ratio chimed in at .67, which is the lowest such reading since October 12th which was a high in the market.
I had thought if we saw an up day Monday, we would leak the remainder of the week, because I thought if the VIX DSI would be single digits. But with that going up, not down yet the put/call ratio super-low, I will say perhaps we shouldn’t get terribly comfortable. The other news of the day was gold. It broke. And is sitting at the upper level of my target range of $170-$172. I had wanted it down there with the DSI low but the DSI is only $30. I suspect a bit of shuffling around here or a bit lower, and we’ll see that DSI fall. I have my eye on it for signs of capitulation.
Let’s begin with a follow-up. I was asked about Philip Morris (PM) - Get Free Report a week or so ago and I drew in a pullback from that line as a place I would warm up to the stock. The price is an area but it’s getting into the zone of $74-$76 (sorry, it’s so wide).
I have a new long-term name for you to look at. The chart of Western Digital (WDC) - Get Free Report has caught my eye for the last few weeks. Near term that resistance at $48-$50 will be tough, but that is looking more like a base every day to me.
The 30-day moving average of the advance/decline line has been trying to work off its overbought reading by going nowhere, which is a positive.
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Nano Dimension (NNDM:Nasdaq) is the kind of chart that I look at and think I have no idea what it can or will do in the short term, but it broke out of a nice base, so sideways action before another move over $6 seems to be what I’d look for.
Intuitive Surgical (ISRG:Nasdaq) completed its measured target at $800, when it tagged that area in August and again a few weeks ago. But it is now in a wide trading range ($650-$800). I don’t get the sense it is going to collapse or fly away, but I would say that the stock is down almost 100 points in three weeks, so it is oversold and deserves a bounce especially if it tags that green line.
For the longest time, I thought Citigroup (C) - Get Free Report was a terrific chart in the bank group. Then came September and it proved me so wrong and shook me out so I gave up on it. It is now back to where I liked it in the first place. I see resistance $55-$58, but overall it has that basing look to it; $55 should be a tough area, though.
I am inclined to think Social Capital (IPOC) is trying to bottom, but it might take some time. Why? This is a perfect candidate for tax-loss selling if it can’t bounce in the next two weeks. Otherwise, as long as it doesn’t have a new leg lower it looks interesting to me.