Someone asked on Monday if long, drawn out bear markets are now going to be a thing of the past. I suppose it is possible in terms of the indexes, since the Fed seems to come save us after a few weeks on the downside. There is a risk that once you say "this time is different" it never is, but we certainly haven't repealed long drawn out declines in stocks.
With the exception of a few retailers, or shall I say online retailers, the retailer charts look very similar to Macy's (M) , which is now down 40% in two months. Of course in the same vein, as what was discussed Monday morning, they bend but they do not break.
Energy too is in the tank. Here's Exxon (XOM) , down more than 20% in two months. Do you notice the way it comes down to the lows and then the selling sort of dries right up? It bends, but does not break.
Or, here's another one that's a real head scratcher. Options trade on the CBOE. Options volumes are going up daily; they are much higher than they were a year ago and yet look at the chart of the CBOE (CBOE) , which is down 20% in two months. In the case of the CBOE, it has broken.
The travel stocks are obvious: airlines, hotels, cruises and the like are all out of it. No one expects they will do well in the foreseeable future. But there, too, most of them bend but do not break. Yet they have had plenty of downside in the last 60 days.
This brings me to Monday's trading. I think it was good news that three of the Fab Five stocks were red on the day. It allowed money to flow into other names. But it's not as though the breadth was anything to write home about.
Remember last Wednesday when the Russell rallied 30 points? Breadth was great that day. It was positive 1,800. Monday the Russell rallied 25 points and breadth was positive 800. Not exactly a barn-burner is it?
There was minor improvement in the stocks making new highs for Nasdaq, but not so for the New York Stock Exchange. Therefore, once again, the rally did not change any of the statistics and indicators. I would love to see the breadth do great, while the S&P sits there or even goes down, because that would be a sign that we really were able to spread the wealth around.
In the end we had the Volatility Index barely down, which can often mean we're due for a bout of short-term volatility. The Daily Sentiment Index for the VIX is currently 15 and Nasdaq's is 88. That tells me that if we rally on Tuesday, then we should see volatility come our way by the end of the week.