Some Say the Market Can’t Fall, But Has Buying Begun to Dry Up?
Sentiment remains bullish for the Mags and Semis. But volume appears to be narrowing. Here’s my analysis.
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The Market
Note: I am speaking at a NAAIM Conference and due to travel, there will be no issue of Top Stocks Tuesday evening. I will be back at it Wednesday evening.
Either/Or. It’s still with us, but there was a minor change today. Usually when the Mags/Semis rally, the Nasdaq volume notches in a decent enough reading as so much of that upside volume comes into those favored few. Meaning, upside volume clocks in near 60%. But today it was 52%. Is it getting even more narrow when we do get rallies in the Mags/Semis?
I am not yet ready to say something has changed until I see it occur more than one day, but it is on my radar since the same thing happened during the first week of October just before the recent tumble.
None of the indicators change after today’s move. I still think there is an oversold condition in the tech stocks (not the others, they lean overbought). You can see that the Overbought/Oversold Oscillator is still languishing below the zero line.
It will also not surprise you to know sentiment hasn’t shifted at all either. In fact, one of the questions I was asked at my presentation was, and I am paraphrasing, why would the indexes break when everyone owns the indexes?
To me that sums up sentiment: there are very few who think the market can break. And by the market, I mean the major indexes. Heck, I too wonder if we’ll ever see the S&P break under 7600 like it means it. Complacency reigns.
New Ideas
I get asked about Uber (UBER) on a regular basis. My view for the last several months has been it is in a trading range, and we buy the low and sell the high. It is now back near the low and it can’t seem to bounce. Earnings are still a week away but if the stock cannot bounce soon, I would have to give up on that view and expect the trading range will not work anymore.
Today’s Indicator
The 30-day moving average of the advance/decline line still leans toward oversold.
Q&A/Reader’s Feedback
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I am still not a fan of CoreWeave (CRWV) but it is oversold and the action today was encouraging enough to think it might actually bounce. I think a rally into the 60-65 area would be a place to sell it though.
PPLT is an ETF to be long Platinum. The chart is terrible. The best I can say is that it is oversold and the DSI is at 10. It ought to bounce but if it can’t get up and over 14.50 in a hurry then I think you’d have to wait for a DSI in the single digits because right now it’s just dripping.
I have not changed my view on NVIDIA (NVDA). It is in a wide trading range. Last week I said if it breaks under 190, I might change my view but for now I think it’s a big sideways as it has been for months on end. Not a top, not a bottom.
