Twenty years ago Cisco (CSCO) was one of the most important stocks in the market. It wasn't as dominant as Apple (AAPL) is now but it had a major impact on the overall market. That is no longer the case.
Cisco's soft guidance and poor price action is having little impact on the overall market while the mighty Apple (AAPL) provides steady support.
The market has benefited lately from a series of big-cap leaders, including Boeing (BA) and Disney (DIS) . It is also benefiting again from a big-cap giant in the form of Walmart (WMT) . Walmart is the 18th highest priced stock in the Dow so it doesn't have a huge impact, but Cisco is the 29th largest so it more than offsets that action.
In addition to Walmart, retailers are seeing a boost from Dillard's (DDS) . The retail group is leading and holding the indices aloft although breadth is running slightly in the red with about 3,100 gainers to 3,400 decliners. It's interesting that the number of new 12-month highs is about equal to the number of new 12-month lows at around 70.
While I maintain an overall bullish bias I continue to have a very hard time putting capital to work. There just isn't much sustained momentum in the stocks that I like. Some of the bottom-fish plays are working such as Personalis (PSNL) after its earnings report last night, but I'd like to see better follow through in names like DataDog (DDOG) and Ping Identity (PING) .
The easiest mistake to make right now is to be too fast to embrace a bearish posture. While there are plenty of good negative arguments for the bears to celebrate, the price action does not confirm the pessimism. We have to stay extra vigilant, although the opportunities are still on the long side. I'll continue to hunt for long plays but will hit the eject button quickly if we start seeing some lower lows in the indices.
(Cisco, Apple and Disney are holdings in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells these stocks? Learn more now.)
