The market closed at another all-time high, although the last four trading sessions were touch and go. Monday, only 1,404 stocks, or 43%, of the NYSE advanced while 1,756 declined. The NASDAQ saw only 911 advancing stocks, or 33%, versus 1,774 decliners. For some, this is alarming as it points to frustration seeking value, but the better way to look at this is that would-be sellers have had four sessions in a row to dump winners, but they are holding.
Of course, there was calm just like this in the weeks leading to the October scare, too. It remains to be seen if the market can get traction and what exactly investors are looking for, but make no mistake, there is a desire for a spark.
The market-higher/internals sloppy situation was especially pronounced last week.
In fact, on Thursday, there were far more losers on the NYSE than winners and new highs slipped from 221 stocks on Monday on the NYSE to just 134 as new lows swelled to 51 from 28.
| NYSE Composite Daily Breadth | |||||
| Daily | Nov.10 | Nov.11 | Nov.12 | Nov.13 | Nov.14 |
| Advances | 1,794 | 1,602 | 1,711 | 1,124 | 1,650 |
| Declines | 1,364 | 1,534 | 1,452 | 2,022 | 1,498 |
| New Highs | 221 | 210 | 138 | 198 | 134 |
| New Lows | 28 | 38 | 40 | 71 | 51 |
The same trends played out on NASDAQ where decliners actually beat advancers on Thursday and Friday and new highs tumbled from 150 to 72 as stocks at new 52-week lows edged from 44 to 58.
Yet there was amazing action on NASDAQ Monday with Apple making yet another high and powerhouse Zillow (Z) exploding higher.
| NASDAQ Composite Daily Breadth | |||||
| Daily | Nov.10 | Nov.11 | Nov.12 | Nov.13 | Nov.14 |
| Advances | 1,677 | 1,264 | 1,659 | 901 | 1,310 |
| Declines | 1,051 | 1,421 | 1,043 | 1,807 | 1,394 |
| Unchanged | 84 | 129 | 103 | 91 | 130 |
| New Highs | 150 | 122 | 133 | 153 | 72 |
| New Lows | 44 | 52 | 54 | 67 | 58 |
For me, it means investors are plowing into names they know:
A) Either these names are up big
B) Or they have potential to "pop" fast
What Matters?
Last Thursday on my show "Making Money with Charles Payne" on Fox Business at 6PM, we had an interesting conversation on and off the air about helping the audience. The stock market is at all-time highs which would imply nothing matters. Just consider, the Dow hit 64 during the Great Depression and now it is approaching 18,000. That suggests anyone that put in a month's worth of income back in the 1930s would be among the richest investors in the world.
This would have happened through world wars, famine, disaster, recessions, Democrats in the White House, Republicans in the White House, Fed money printing, and Disco.
That's a fact, but there is another fact and it is that most people are worried about their lives day to day including their hard earned money. I get that, and I've dealt with it for 29 years. Most of the ideas on my services are designed to be held long term, but when they pop 30% in a couple of weeks, I ask my subscribers to take some off the table.
In my heart, 90% of the time, I know that's a mistake... If only they were willing to ride the waves, but even those that say ‘yes’ really aren't going to hold great companies during the next big down turn.
On that note, investor confidence has soared according to the American Association of Individual Investors to a point on the cusp of exuberance.
I can tell you there isn't that kind of excitement in the air, but there is a story here. Back in March of 2009, the AAII bullish reading was 18.9, a record low point, when the market was a screaming buy. So it is easy to say that now that the reading is in the 95th quintile, it must be a screaming sell signal. The problem is there has never been a screaming sell signal.
I jest, but this market is too inexpensive and there is no exuberance in the air associated with massive corrections and market crashes.
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