Does Anybody Care About The Others?
The Others should have rallied already, but investors simply seem to be disinterested in them. This is not bullish. Plus, PHM, JBHT, DPZ, MCD, and WM.
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The Market
When a market is supposed to do something, and it doesn’t, I find it is sending us a message. It really should have rallied the Others over the last week and a half, but it hasn’t. In this case, I’m not even sure I can call it weakness. I think I’ll call it disinterest. It seems no one is interested in buying the down and outs. They languish.
The S&P is at a new high with more new lows than new highs. Look at the surge in stocks making new lows today, a day when the S&P trod water. I cannot spin this as bullish.
Yet the call buying doesn’t quit. The 21-day moving average of the ISE call/put ratio is now the highest since October 2007, the month the market made its high for that cycle. In fairness it was higher in 2006 but my point is that despite so many stocks languishing, the call buying is enormous.
Even the banks, with the big move up today show the Bank Index sitting fractionally higher than where they were at the end of the first quarter. And the banks have been one of the better groups! As they head into earnings later this week my view on the banks overall is still positive but a failure to get over that 107-108 area will have me concerned. They become vulnerable to profit taking, having rallied 6-7% in the last month.
New Ideas
There are two charts I am going to watch closely in the coming weeks. Well there are more than two (last night I highlighted XBI getting over 95) but let’s focus on these two now. The first is Pulte PHM. It has managed to hold 100 but a break of 100 would be bearish (obviously) and would measure to that 80 area.
Hand in hand with PHM is JB Hunt JBHT which has not been able to bounce at all since its gap down last quarter. If it breaks it ought to take the Transports to a new low.
Today’s Indicator
The McClellan Summation Index is flat, not heading up or down. Earlier this week it tried to turn up but so far it has sat there, trying to rise but unable to do so. And that tells you what the majority of stocks are doing.
Q&A/Reader’s Feedback
That’s a decent break in Domino’s Pizza DPZ. It measures to the 460 area so unless it gaps up over 500 that’s where it ought to go.
I really thought McDonald’s MCD was going to rally to the 265-270 area on that last trip to 250 but it only made it to 260 and now it is lower. There is support from last fall’s low but now I think the potential is spoiled. I’d sell a rally to 250-255.
Waste Management WM might just rally again but lately unless you are tech or tech related you are more apt to fail on a rally. In fact it looks more like this is just trapped between 200 and 215.
