The S&P 500 is exactly four points higher than it was two weeks ago. Yes I know it feels like it’s done nothing but go up but it turns out the last two weeks of October have been a chop-fest. And more than that, it’s had one of the widest ranges we’ve seen in quite some time-about 40 points.
I realize 40 points in today’s market is a mere 1.5% but when we consider how much up and down that has given us, something that was lacking a month ago. I am at least encouraged that there is more up and down!
I also continue to watch the ratio of the Russell 2000 ETF (IWM) to the PowerShares QQQ Trust, Series 1 ETF (QQQ) . There was a minuscule tick up in it on Thursday. The last two times we saw this ratio make a low it took a few weeks to do so and we saw a higher low in the ratio. That hasn’t happened yet but at least the last few days have seen a slowing of the momentum of the decline.
I also continue to watch this line on the chart of the Russell 2000. As poorly as the small caps have been in the last 4-5 weeks the Russell 2000 has refused to break that line.
Insert rut here.
Then there are the Transports which have fallen almost 4% in the last few weeks. Thursday they found some support. A Dow Theorist would not be happy with the major divergence we’ve seen between the rise in the Industrials and the decline in the Transports. It is amazing to me how closely the Transports move with the small caps since that never used to be the case.
I realize everyone was so excited over the new highs in the major indexes on Thursday but it was really only the Dow that was so hot; everything else was pretty flat and so was breadth. It was the increase in the number of stocks making new lows that continues to nag at me. Nasdaq saw 81 new lows on Thursday, up from 76 a week ago. These indexes are at new all time highs, shouldn’t the number of stocks making new lows be under 20? Yet they are not.
In any event the market finds itself in the same place it has been, grinding indexes and a lot of gaps in stocks underneath. What is most interesting though is that despite the fact that the S&P 500 is essentially the same price it was two weeks ago and the Russell 2000 is lower the American Association of Individual Investors finally saw the Bulls rise to levels not seen since January. I would have thought they would be more bullish in late September when individual stocks were actually doing better.
Overbought, Oversold Oscillators