Last night on CNBC’s Fast Money show the “Options Monster” ponytail guy said to buy GOOG and another of the “Fast Money” boys said buy NVDA even though the Nasdaq is now leading the market down, but I believe that we are now entering a new phase of market action and people are not ready, because it feels like the stock market has barely been moving up or down on any given day for months.
And I know today Steve LIESman is on CNBC talking about an economic boom as the DOW futures are up about 40 in pre-market trading after the DOW fell almost 150 points yesterday.
But it is “green shoots” – to borrow an old Ben Bernanke phrase – they see and everyone else is bullish too.
Recently though all the opening gap ups have been sold by the end of the day.
The views of the stock market masses are eventually going to change as the stock market swings continue and we got to get ahead of it.
Now we have seen some interesting things happen this week.
Of course, TSLA blew up and now the TSLA stock rally is OVER.
But so did MU last week and ORLY this week.
And NFLX is now acting very bad.
Apple is becoming a dud again.
But look at this technical analysis chart:
This is the percentage of stocks trading in the Nasdaq 100 index above their 50-day moving average.
It began to diverge away from the market in February and did not rally above its April high in May despite the fact that the market had a big rally and many of the fad momentum stocks had HUGE moves up that month.
But this indicator did not move up and so it warned us that something was wrong.
It was a huge tell!
And now that indicator is plunging.
Yes, the Nasdaq itself is now below its 50-day moving average.
But this indicator action is warning that the Nasdaq is now heading for its 150 or 200-day moving average next!
The era of the VIX trading below $10.00 is now over and that means big swings down and up are coming.
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