Lately it seems they keep trying to crack the senior indexes to the downside, but they keep getting saved by the end of the day. Individual stocks, though, are not so lucky.
Today's breadth was negative for the third straight day, the longest streak since mid-August. Net volume has been red for six of the last eight trading days and the last four days in a row. Yet the S&P 500 sits where it was, or not far from it, last week.
Then there is the number of stocks making new lows. While we haven't seen an increase over the peak readings of the last few weeks, today's action saw the NYSE new lows jump up to 104. Friday there were 60. On Oct. 25, there were 111. So for now, 111 is our peak reading.
The question that keeps popping up in my inbox: When will this end? When will the indexes care? I wish I had the answer for you but I don't. I can tell you that if we can see them sell the market off in the next few days, it will get us to an oversold condition, probably enough to rally again.
I know an oversold condition sounds ridiculous. But look at the Russell 2000 ETF (IWM) - Get Free Report. It has been dripping for six straight weeks. If it comes down to the blue line, I think it would be grossly oversold. If it rallies to $148 then it is a test of how well it can rally: Can it get over $148? For now I think it can't.
The ratio of IWM to the Nasdaq 100 ETF (QQQ:Nasdaq) hasn't done anything for days. It needs to lift.
So I maintain we would be better off if we could see the market down first.
How do we get oversold? Look at the chart of the iShares Transportation Average ETF (IYT) - Get Free Report. It's bounced right off support. It should be able to rally to $174-$176. The operative word is "should."
Speaking of transports, United Continental (UAL) - Get Free Report cannot get off the mat. It is starting to look as though it needs a flush, a break that clears out the sellers and then reverses. Quite frankly, in this market stocks like this have tended to leak rather than flush.
One final word. Several of you have asked about Allergan (AGN) - Get Free Report on a regular basis. Today's reversal off $170 could be the beginning of a bottom. It is still too early to tell, but at least you know the stop: Under $170 and you're wrong. I like it, at least for a trade.
The 30-day moving average of the advance/decline line looks like it's oversold, but the math behind it says "not so much."
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I was dead wrong on the utilities as they have continued upward. Con Ed (ED) - Get Free Report has been part of this amazing rise. A measured target would be around $90. If it gets over that, then I suppose the 90/100 rule applies (90% of the stocks that make it to $90 will make it to $100). Here's my question, though: If ED rallies another 10%- plus, what will the yield be? It is currently around 3.1%. That would be quite incredible. In any event, support is now $85.
GlaxoSmithKline (GSK) - Get Free Report completed a head-and-shoulders top and still has an unfulfilled target around $33. I would wait for a pattern to develop. For that to happen, it needs to rally and come back down to retest. It hasn't even rallied yet. The best news is at least it's close to the target.
I thought Electronic Arts (EA) - Get Free Report was at a top a few weeks ago. Then it rallied to prove me wrong. Now it's come back down, to prove me wrong again. It still looks like a top. Support is at the intersection of those lines, around $107.