Folks Are Climbing Back on the Bull Bandwagon
The market is overbought and bulls are coming back to play. Plus META, CME, MU, and ZTS.
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The Market
With all this breadth, I keep expecting the charts to look different or better, or at least more than the churning we’ve seen for the last four days, but so far, that has not been the case. Perhaps Chair Powell will save us on Friday!
Or maybe this is just the market’s way of working off the overbought condition. Whatever it is, we’re back to talking about sentiment. The Investors Intelligence bulls, who had gone from 64% to 44%, are now back to 50%. So, folks are climbing back on the bull bandwagon.
The put/call ratios continue to stay low, although not as low as they were on Monday. The ten-day moving average is now at 92% so when I said yesterday this could be under 90% by the end of the week, it seems I was on track. In fact, I would guess this is at .90 or below by the end of the day tomorrow.
I point this out because you might recall the Investors Intelligence bulls had gotten to where they were last fall but it took them months to get to 60%. It might take months to get to 60% this time too. But look at the put/call ratio’s moving average from last fall.
It came down and milled around for weeks—over 1.0. And then it came down again, but still, it took six weeks to travel from that midpoint around 1.05 to .87. This time, the whipsaw has been less than a week.
Then, there is the DSI for the S&P. It is back at 80. So if Powell says something that gets folks really excited this will be into the yellow zone right around that time. (over 85).
Finally there is the US Dollar. I’ve not yet seen extreme fussing over it. Just a mention here or there. It is getting grossly oversold at the prior low and the DSI is 14. Put this on your radar, it’s getting close to an inflection point.
New Ideas
I was asked to follow up on Meta META, which I recommended a couple of weeks ago. It has resistance here so if you wanted to sell some I wouldn’t argue against it, but I do think it is going to try and breakout over 540 at some point. I would prefer we get the market oversold again though. I would use a stop under 520.
Today’s Indicator
The Volume Indicator is at 56% which is overbought.
Q&A/Reader’s Feedback
I have tried a bullish stance on CME CME several times and as you can see the stock has gone nowhere in a year. My guess is it rallies again after a pullback but there is too much resistance to eat through so it’s going to take a lot to get through it.
Micron MU has a lot of resistance at 110 but I view that move to 85 as a cleanout. I would love to see MU either mill around here (over 105) or have a quick trip down to 102-ish before rallying again. There is a lot of resistance to eat through but I do think it eventually gets through 110.
Zoetis ZTS looks like a stock going nowhere. If it fills that gap just under 180 I’d look for another rally, otherwise it looks mostly sideways between 170-190.
