So Much News, So Little Change in Breadth
Small-caps made a break for it this morning, but investors had spoken by the end of the day. And they told us that they still only care about the mega-caps. Plus, we take a look at SHOP, PYPL, MCD, MRNA, and EWW.
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The Market
Gosh, I really want to tell you how great today was, but all I can say is that we got an oversold rally in the small caps. Aside from that, it was more of the same.
Breadth was obviously better if we use the a/d line. If we use volume (up minus down), I admit I was shocked that it was flat. Let me reiterate, volume in up stocks vs. volume in down stocks was flat. We rarely see that when the Russell is up over one percent on the day.
We did get an increase in the Investors Intelligence bulls, back over 60%, although the bears are a bit more than they were last time we saw this many bulls (early March).
Sticking with sentiment, let’s visit the DSI because it is now knocking on the door of extreme. The S&P is now at 87. Nasdaq’s DSI is at 88. The VIX sits at 12. As a reminder over 90 is extreme.
If you need an example, recall at the recent high Silver, Gold and Copper tagged 90.
New Ideas
This is just a reminder that Shopify SHOP is about to close that gap from early May.
And another reminder of how difficult this market has been for anything not mega cap. I had thought PayPal would rally to 64 and stop. Then it gapped up over 64 and I figured I was wrong. Now it has given up that rally as fast as you can imagine. It’s got a big test now to see if it can hold here.
Today’s Indicator
The Volume Indicator is heading toward an oversold condition as it now sits at 51%.
Q&A/Reader’s Feedback
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McDonald’s MCD finally filled the gap down below (from October) and then the more recent one (late May) so it ought to bounce. I don’t think it can get much beyond that 2622-265 resistance area just yet though.
Moderna MRNA had a measured target of 160-175 and it tagged 170 in this last run. I do think after some sideways action it ought to rally again. I’d like to see it spend a few weeks between 130-145 to gain the energy to rally again.
EWW is an ETF to be long Mexico. That top it broke down from measures to this general area. However I see no reason we should get more than an oversold bounce from this chart yet. If it gets to 54 I’d look for an oversold bounce but that’s it.
