Wednesday was an interesting day in the financial markets, to say the least. While the Dow Jones Industrial Average (INDEXDJX:.DJI) was up solidly (0.7%), the NASDAQ 100 (INDEXNASDAQ:NDX) was down (0.13%).
Despite the headline glitz of the Dow Jones smashing through 23K to new all-time highs, just 16 of the 30 stocks in the index were up. And 3 stocks (IBM, GS, and UNH) are accounting for most of the gains.
Market Thoughts
Market breadth is flat for today while more volume is flowing into down stocks than up. As well New highs vs New Lows has fallen off dramatically from early October readings and this is problematic for those following the Tax Reform to new highs scenario and thinking this can last.
DeMark signals will be complete tomorrow on the S&P 500 (INDEXSP:.INX) aligning daily and weekly while a few key short-term cycles suggest the next 3-5 days could be very important. Signs point to a coming top.
Sector-wise, Financials are leading all other groups, following suit on today’s bounce in 10 Year Treasury yields. Energy, Materials, Staples, Utilities, Telecomm and Real Estate are all lagging behind. Overall the biggest positive in recent days concerns the uptick in Healthcare after nearly a month of consolidation. The biggest negative would have to be the downturn in the Financials and Rails, which granted has been a process and not straight lower. But the breadth concerns are growing, and this is a very real issue that will need to change if this rally is sustainable.
S&P 500 Daily Chart
US stocks have begun a topping process which should offer limited upside and produce more meaningful trend reversals between now and early next week. Stocks should begin to put in some type of peak in the days ahead.
NYSE A/D Line… rolling over?
There is some evidence of the Advance/Decline beginning to peak out…
Thanks for reading.
Twitter: @MarkNewtonCMT
Author has positions in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
