The major indexes aren't really moving -- and on Tuesday individual stocks didn't do much of anything, either. But at least on Wednesday we saw some movement under the hood. And it was on both the upside and the downside.
Unless you are interested in playing stocks for their earnings, however, there is so little going.
Yet, while the indexes were flat to barely down, the breadth was positive, which is something we didn't see on Tuesday. That means the breadth indicators are still rising. Most of the major indexes are where they were two weeks ago, so there is a lot of chopping about without either side gaining traction.
But the utilities -- which had been up over 15% in a month -- have now been red for six straight days. That's something they haven't done since early August. Consider that since November we've seen interest rates about double and the Utes did not see six straight days of red.
The reason I find this so fascinating is that the decline in the Utes in August was exactly correlated with the initial rise off the lows in rates. That's point A on the charts below. But notice that rates were steadily upward since then and the Utes meandered up and down. They do not, and have not, moved in lock-step.
So what's so important now? Rates haven't blasted off with the move in Utes this time. In fact, they have just sat there, sideways. So, is that move in the Utes eventually going to mean interest rates push higher? Probably. But it is certainly something worth paying attention to. The Utes are oversold (anything down six straight days is getting oversold), but I suspect they eventually make their way back to the $880-$890 area before finding any footing again. I suspect by then others might start noticing their weakness. After all, it wasn't until they had rallied 15% that anyone bothered to focus on their upside.
Aside from that we saw the sentiment get a bit exuberant during the first two trading days of the week, despite such little movement in the indexes. By Wednesday, I suppose, they were frustrated and decided to buy some puts because the put/call ratio moved up to .81.
The most curious part of all of this is the ISE Equity call/put ratio surged to 2.1, which is the highest reading since March 1. Remember, a high ratio for the ISE is akin to a low ratio for the put/call ratio since they are inverse.
The other change in sentiment was the Investors Intelligence bulls came down 4.5 points to 59.2%. That's not a giant move but it is the first time they have gone below 60% in a month. So the last two weeks of chopping about has made folks less bullish.
There are pockets of selling and pockets of buying, but no one seems willing to want to push the market as a whole in one direction or the other right now.