Is the Market Primed for a Pre-Holiday Whoosh?
On a day that the Russell and S&P 500 were up, so was the VIX. What could it mean?
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The Market
At least the Russell rallied. And the banks. And the SOX is now up almost ten percent this month. I guess folks only care about the SOX when NVDA is on the move. But it got to that upper line I have been waiting for, even crossed over it.
Yet despite those items that go in the good news category, breadth was red. Upside volume on the NYSE was a mere 38%, and the number of stocks making new lows expanded to 132 (from 113 on Friday)
The other curious thing was that the VIX was up quite a bit today while the S&P was solidly green. As I have said before, I have seen statistics that say that can be good or bad. My work is more that I eyeball the chart of the VIX (been waiting for a rise in volatility for two weeks now), and I use the DSI, which had been knocking on the door of 10 (but did not get under it) last week.
We’ve got the FOMC later this week, so maybe we get a whoosh in the market just prior to Christmas. I am still in the camp that we should get a year-end rally but will my patience wear thin?
New Ideas
IWM is oversold. It would be great if it could fall and tag that uptrend line (that would surely get some panic) before the end of the week.
Today’s Indicator
The 30-day moving average of the advance/decline line is not oversold.
Q&A/Reader’s Feedback
I never thought Exxon XOM would collapse back to the low but it has. Is this tax loss selling or something else? One thing I can tell you is that almost all the groups we look at are saying ‘slowdown’ yet none of the economic indicators say that. It’s possible the charts are wrong but a year ago all the economists said recession and the charts did not. Let’s see who wins now
In any case, XOM has support here. With the oversoldness it ought to rally but I cannot get behind it because I don’t see panic the way we did in September. All I see is year end selling. Why should it rally? There is a seasonality factor for energy that it tends to make a low in mid December.
I had thought 180-190 was all Alphabet GOOGL could do but I was wrong. It has a measured target in the 230-ish area now but I would use a stop under 190 because you don’t want to see it back under that support.
We looked at IHF the other day. It’s an etf to be long the healthcare providers. It was down near support but it stopped for a day and continued lower. Now we have a question on bottom fishing Cigna CI. It looks overdone but the top it broke down from measures to 265 so it’s getting close to that. A low would have to start with a bounce, then it would have to build a base.
