No Need to Cover Your Eyes, This Market Has Gone Nowhere
We have had an awful lot of nothing the last month or so — and what has moved is not enough of a weight to help the indexes. Let's look directly into what's happening.
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The Market
The most exciting action of the day was outside my office watching the solar eclipse. The market, in contrast, was truly like watching paint dry.
We’ve discussed the fact that the Nasdaq has gone nowhere. Do you realize that the QQQs (Invesco QQQ Trust) closed at $437 on February 9? Today, two months later, they stand at $440. Yet in that time folks have gotten even more bullish.
The small-caps and all that broadening out chatter isn’t much different. The IWM (iShares Russell 2000 ETF) closed at $203 during the final days of 2023. Today it stands at $205.
The S&P 500 closed at 5175 on March 12. Today, nearly one month later, it is at 5202.
So we have had an awful lot of nothing in the last month or so. What has moved is not enough of a weight in the indexes to help them: Metals, mining and energy.
As you know I have been waiting for the DSI on Gold and Energy to crest 90 and that hasn’t happened. But there have been an awful lot of readings in the upper 80s. In fact, the five-day moving average of the Gold DSI is now 87 while Oil’s is 85. And I’m starting to see random folks singing the praises of the precious metals. Do not be surprised if a pullback shows up.
Many of you have asked about the bonds, and I am on the fence now. As you may recall, I thought a bounce off that short-term uptrend line would pave the way for a move up and over the recent high in rates at 4.35%. It did that but it did it and then stalled. In other words, where is the breakout?
Then I think if we get a hot CPI reading on Wednesday maybe rates will spike and exhaust themselves and we would want to buy TLT. But with the move up here and the lack of a true breakout I am sidelined for now on interest rates.
I will conclude with the obvious: the lines held. That means the S&P’s line held, the Nasdaq’s line held, the IWM’s line held. The DJIA and the QQQs did not recapture their broken lines.
New Ideas
I keep waiting for IBM IBM to come down and tag that uptrend line because then the risk/reward would be good. Yet it cannot seem to get down there.
Today’s Indicator
The 30-day moving average of the A/D line is overbought.
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.
If you want to use a tight stop on Sea Ltd. SE then you would use a stop under last week’s low. I look at this chart and think from a longer-term perspective it looks like a base. The stock probably takes more time to develop but unless it breaks $50-ish it should be given the chance.
New Oriental Education EDU has "the line" so unless/until it breaks, it’s a hold. I can’t get excited about a stock up so much already. I would think it is bearish if it breaks $80 though.
When I recommended PepsiCo PEP a few months ago I had a target of $175, which was achieved. Now I can’t decide if we should wait for a gap fill around $165 to buy it back or if it stops here and holds up. I’m inclined to think whatever it does is going to take some time. Notice when it curls up it tends to take its time over a few weeks, and not just "V" bottom.
Wayfair W is a chart I’m on the side about. It has stopped at this line for the last nine months and it has that spike high just over $70. I’m going to say for now I’d think it’s in a $60-70 range. If it breaks either way then I’d go with the move.
