Hotter than a two dollar pistol
When I speak of bad breadth in the market, as I briefly addressed last night, I really mean lack of participation where everyone jumps in the pool at once and has really good time.
That means all sectors and indexes are hitting on all cylinders at once.
A couple of weeks ago the Dow had a great day because IBM was up big. That IBM move that day accounted for about 80 of the Dow’s 130 points.
Today we saw good earnings numbers for CAT & MMM. CAT rose 5% and MMM rose 6%. These are big moves for smokestack companies, don’t get me wrong, but a huge part of the Dow’s 168 point move today was because of those two stocks.
Notice the SPX, Nazzy and Russell were all just about flat today. Notice though that FAANG stocks FB, AAPL, AMZN, NFLX and GOOG have all been acting very heavy the last few days.
Biotech is back to acting crappy lately, it deserves a rest, but my point is that we aren’t seeing cooperation from all sectors here.
That can be fine, we always see mini-rotations and stealth 2-3 % pullbacks in sectors all the time, it’s just a good time to be aware of your surroundings right now.
It doesn’t mean sell, just trade a little smaller and make sure your stops are where you want them to be.
No new ideas tonight, see you in the chat room in the morning.
P.S. CMG imploded after the close. Bill Ackman was seen down at the Bowery, right off Canal St trying to score a knockoff Hermes overcoat.
