Ring! Ring! The Magnificent Seven Are Back
The Mag 7 are back in business. But what's going on with bonds? We'll also look at XLU, GOOGL, CMG, C, and KWEB.
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The Market
Here we are, after four months of the Mag 7 being sidelined, they are back in business. The QQQs did not breakout yet but they might still do so this week. And yes, I think that changes sentiment.
Today was just more sloppy action. It’s been a few months of sloppy action. If we get a pop here we get a drop there. And so on.
The one thing that changed today, or at least that I have noticed is that the bond proxies have been slowly leaking but today many of them gapped down. The Homies did it on earnings. The Utes finally gave way today, although there is no lower low there yet. 77-78 is a big level that needs to hold
The XLP names gave way, too. The REITs didn’t drop as much as most of the others but they, too, gave it up. And yet, if my eyes don’t deceive me, the TLT closed in the green today after gapping down.
We have been sucked in before to this action, but keep in mind that today’s action came with the DSI at 19. The DSI ended the day at 20, so there was a minor uptick. I have been wrong but I remain constructive on TLT.
While the market is short-term oversold, it is not intermediate-term oversold. That is why I think we keep getting this sloppy action. The result is that the S&P grinds upward but there is nothing that feels like you can sink your teeth into it.
Sentiment is not giddy but it is complacent. And the action is sloppy. Does everyone expect a rally post election?
New Ideas
If Alphabet GOOGL can hold the rally that it has after hours in tomorrow’s session, I would remind you that my target has been in that 180 area to fill that gap. The head and shoulders bottom measures to the 188 aera.
Today’s Indicator
The McClellan Summation Index is still pointing down. It needs a net differential of +2700 advancers minus decliners on the NYSE to halt the decline.
Q&A/Reader’s Feedback
Chipotle Mexican Grill CMG still measures to the 62 area where there is resistance.
I keep trying to decide if Citigroup C can finally breakout to the upside. The stock has been sideways since the sprin, which is quite different than the Bank Index, which has gone on to a new high. Therefore, relative to the Bank Index, this is a laggard. So I will call it a hold as long as it holds over that uptrend line (61-ish). I thought by now it might have been higher, which was my same view on BAC, thus my hesitation.
That line I drew in on Baidu BIDU last week worked in that it bounced from it. So naturally, now I am asked about KWEB. For the first time since the collapse from the high I see higher lows. Sure, it is down today, but now I can say that if it comes back anywhere in that 29-31 area, I’d be a buyer. I know it’s a wide range, but that’s the support. And yes that means a break of 31 is still okay to me.
