The indices are showing minor gains but breadth is running better than two to one positive and there are some unusual swings in various stocks due to the Russell index re-balancing. It is slow summer Friday but at least there is a positive tone to action.
There are only about 140 stocks making new 12-month highs but 65 making new-lows. These are not the sort of numbers you would expect for a market that is near all-time highs and it illustrates why the Hindenburg Omen has triggered several times this week. The Omen seeks to measure how divided the market is and it certainly has been a feast or famine situation lately with groups such as biotechnology running hot while oil, retail and financials have been weak.
The theory behind the Omen is that strong markets tend to see stocks move in correlated fashion. When there is an extreme mix, that is suggestive that a top is forming. There is some proof that the theory works but the timeframe is fairly long.
I've made a few minor trades today and am watching Health Innovations (HIIQ) quite closely. HIIQ is one I like longer term and it is being added to the Russell indices today. It has higher volume already and will have some large blocks at the close.
The problem is that the index addition corrupts the charts. The volume surge isn't a function of ordinary supply and demand so it is much harder to rely on the chart. You will see a lot of interesting volume patterns on charts this weekend but they won't be very helpful.
The FAANG names are back in the lead today and there isn't as much rotation taking place. The slow drift upward is keeping the bears on hold.