Mighty Hard to Find a Recent Dow Winner

 | Sep 29, 2013 | 7:30 PM EDT
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The government shutdown looms -- and lest you think that is the only issue if this doesn't come to pass, we have the congressional debt-ceiling debate coming in mid-October. If that is not enough for you, then what about earnings? Oh yes, earnings: They still matter, don't they?

Did you ever notice that Wall Street loves catch phrases? All summer long we heard we were in a "stock-pickers" market. Now all we hear about is "price-to-earnings expansion." This weekend I thought about the "stock-pickers market" as I went through a pile of big-cap stock charts. I began with the 30 stocks in the Dow industrials. Before you scoff, I am not referring to the ancient index but rather the 30 individual names that make up the index -- and, wow, is it hard to find a winner in that pile!

Join me in the exercise as we go through the first 10 Dow names in alphabetical order. I've found three actual winners out of these 10 over the last six months -- which means you've had a 30% chance of finding a winner out of these. When I expanded that last to all 30, the win rate went down to about 23%. You would have had to be one heckuva stock picker to find those gainers.

Let's have a look:

3M (MMM) is a definite winner, as it continues to make higher highs and higher lows.

3M (MMM)

We've looked at American Express (AXP) before. I suppose that, if you'd managed to buy that low in late April, you would have had a winner on your hands. But, any time after that, there would not be much to write home about. I see a trading range at best between $72 and $78. Keep in mind that folks didn't start calling this a "stock-pickers market" until after the June low. By that criterium, this is not a winner.

American Express (AXP)

It's pretty obvious from the chart of AT&T (T) that this isn't one of the winners. If we flipped this chart upside down, it would be almost the inverse of AmEx: You would had to sell it in late April, or else you would have been sitting with nothing.

AT&T (T)

Now, Boeing (BA) is a winner any way we slice it. The stock even gave you a chance to buy it. I am not a fan of shares that have risen this much, but if Boeing can stay above that uptrend line, then it won't have done a thing wrong -- and it will remain a winner.

Boeing (BA)

Everyone seems to be negative on Caterpillar (CAT) -- yet shorting it wouldn't have made you much money in the past six months, either. Talk about sideways action!

Caterpillar (CAT)

In the last six months we've seen a terrific rally in oil, so why is Chevron (CVX) not a "pick 'em?" I don't know, but you surely didn't do well if you've picked this big-cap name for your oil play. Dare I call this a head-and-shoulders top?

Chevron (CVX)

No matter how you look at it, Cisco (CSCO) has not been a great stock to own unless you'd managed to buy it before that earnings-triggered gap higher in May. Even then, you would have had to sell it in order to have had a great pick. The best thing we can say about it now is that it's got some tenuous support at $23. It's not pretty.

Cisco (CSCO)

DuPont (DD) has been a winner. Even though it made a new high and died in September, the general trend has been higher.

DuPont (DD)

Back in the oil patch has been the biggest dog, Exxon Mobil (XOM). The best thing you can say about this chart is that the price hasn't broken support.

Exxon Mobil (XOM)

General Electric (GE) is not as obvious as AmEx, but if you haven't caught that April low, you've got at most a gain of a buck in the stock.

General Electric (GE)

So there you have it: These are 10 of the largest capitalized stocks in the U.S., and you would have had a 30% chance of finding a winner among them. I am not saying there aren't winners out there. I am saying that, in the last six months, it has been hard to find many consistent winners. When the list of these is so narrow -- especially in the big-cap arena -- it is not a stock-pickers' market. It is a narrow and confined one, and one that cannot continue to push ever upward until the breadth widens out.


Overbought/Oversold Oscillator -- NYSE

Overbought/Oversold Oscillator -- Nasdaq

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