Stocks These Days Are Home on the Range
The Market
I look at the statistics and I look at the indicators and I see breadth making a new high, where the S&P 500 has not yet done so. I look at the McClellan Summation Index and see it heading up.
I look at the Utes and see how well they have behaved. I look at interest rates and still think they go lower for now.
And then I look at the stock charts and so many (most) of them have literally gone nowhere for months. They don’t make new lows and they don’t make new highs. They just slosh around. Down below you will see Apple (AAPL) , the perfect example. What can we say except that the stock is in a giant trading range.
Then I look at the down-and-out stocks that I’ve tried so hard to bottom fish. We’ve had some good success with them. But step back and ask yourself, have the charts really pushed out of the range they have been in all year? Most haven’t.
Now we find the Nasdaq leading. It is just shy of its spring high.
But look at the Overbought/Oversold Oscillator for the Nasdaq: it did not go up today. Because it is overbought in the short term. And we see that the upside volume was only 62% of the total volume. You might recall two weeks ago when we were oversold I kept noting the Nasdaq was down on the day but upside volume was over 50%. I think this is another sign of short-term overboughtness.
Then I look at the "what if" for the McClellan Summation Index. It now requires a net differential of -3,100 issues for it to halt the rise. It’s hard to tell on this chart but that has typically meant a short-term pullback or a choppy market to digest the move (it’s another way of showing the market is overbought).
To close this out, I should note that the DSI for the VIX is now 10. As a reminder, in July it got to 10 mid-month but the market didn’t care until the last few days. But I think a pullback would be a good thing
New Ideas
In an effort to look for down and outers I’ve got my eye on e.l.f. Beauty (ELF) . As long as it holds this $160-ish area I think it’s worth a shot for an oversold bottom fish.
Today’s Indicator
The 30-day moving average of the advance/decline line is a big mush. It’s not really oversold, it’s far from overbought. It’s more like the stock charts: hovering.
Q&A/Reader’s Feedback
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When discussing Apple’s (AAPL) chart I just want to say how annoyed I am that the stock did not break $160 before it ran. I was waiting for a break of $160, figuring we’d get pure hysteria and then we could buy it for a trade. And we never got that.
So what to do now? If the stock fills that gap in the $175-178 area I would look for it to rally again but overall it looks to me like it is in a trading range
Anheuser-Busch InBev (BUD) is an interesting chart because when it got to $57 it met its downside target and now seems to be forming a small head-and-shoulders pattern. As long as it doesn’t crack much under $58-ish I like the stock. Sure, that resistance at $61 is a challenge but as noted above, it met its target on that recent break.
I was asked to revisit Analog Devices (ADI) , which I liked when it got up and over $200 a month ago only to see it spit me out (and then some) thereafter. I still think that entire sideways action of 2024 should be considered a base of sorts if it can break out properly.
