IF you believe what Nasdaq is doing, then market looks super strong.
Nasdaq @ series of new all time high...
BUT SOX a deeper component of Nasdaq is 12.62% lower than its high.
This is a clear cut definition of this market, its a NFLX, FB GOOGL PANW market , these stocks are making new all time highs while SOX is struggling big time.
I have never seen a market environment, where one index like Nasdaq is in a runaway bull market while its most important component SOX lags badly.
Dow is 14.44% below its all time high, another deviation which i have never seen before is a Nasdaq only led bull market....
This is "highly troubling"
SO...the question is, what to expect going forward and what could be a good strategy.....
Going forward , this is not a season to have strong TAPE action...
It is extremely difficult to duplicate what has happened in stock prices of above listed stocks.
AAPL is expected to report this week, will it show a growth in profit like Google, that is left to be seen.
I see sporadic strength continuing till the end of earning season, but after that a pullback.
VIX is telling us that we are nearing a "top"
Anytime VIX is in 11 area , we are staring @ top of the market.
3 year low is 10.28, we did hit 11.77 , which is a 1 year low.
It is important to know what is a "historical norm "
History always guides us, when to be "super optimistic " and when to be "super cautious "
We may have reached the other extreme of this fulcrum.
Good luck with your own analysis and comfort level.
BLOG does NOT give buy or sell.
Saleem
4 comments:
Hi Saleem,
I am very positive on the market still, especially in the growth stocks. When large caps like GOOGL and FB can make such disproportionately large moves, it is a sign that managers are very underinvested right now. Even slightly good news is being treated extremely favorably--I think this run continues.
Stocktrader
Hi Saleem,
Trimmed over half my NEFF @ ~10.02.
Indications are that the equipment rental market is very sluggish, so despite the good valuation, it seems maybe earnings are at risk? The chart is also signaling trouble ahead.
Stocktrader
Hi Saleem,
Sold C @ 58.70 to take profits.
I still have PRU, but am feeling a bit of a deflationary pulse right now. I might sell PRU in the near future if the treasury yields start falling.
Stocktrader
Hi Stocktrader,
Good move to prune weaker ones and book profit in C.
Saleem
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