• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • TheStreet Smarts
  1. Home
  2. / Investing
  3. / Stocks

It's Important to Look at More Than One Day in the Markets

If you judge the market just by Monday's action, you'll miss what's been going on.
By HELENE MEISLER
May 07, 2019 | 06:00 AM EDT

Sometimes it is better to step back and consider the market rather than react to a one day move. That means we shouldn't react to Friday's rally or today's decline.

Consider this. Two weeks ago Nasdaq was at 8120 and today it is at 8123. Two weeks ago the S&P was at 2933 and today it is at 2932. With the exception of the small-caps, there has been a sideways correction in stocks for two weeks now. Yet every day in the last few weeks we hear about the Melt Up.

Let's review the indicators. We are not oversold, not on a short-term basis, not on an intermediate term basis. In fact we lean overbought on an intermediate term basis. The 30-day moving average of the advance/decline line is overbought as is the Volume Indicator which is still hovering around 52-53% (oversold is low to mid 40s).

The number of stocks making new highs increased last week midweek but when given the chance on Friday it contracted. In addition, the McClellan Summation Index continues to go down as it has since mid-April. That means that the direction of the majority of stocks is mostly down although when I look at my charts I see an awful lot of sideways. Still, the message is "it is not up."

On the sentiment front, we finally got the Investors Intelligence bulls over 55%. They might even be higher this week when they are released because they do not reflect today's trading. So we got to a minor level of giddiness.

We also have the 10-day moving average of the put/call ratio coming up off a low. Monday's put/call ratio was 105%, which leans high, especially for a day we rebounded, but the 10-day moving average says we should correct in the market. Is a correction always down? Sometimes it's sideways.

As you know I like that the small-caps are doing well, something I have thought should happen for the last 5 or 6 weeks. Until Monday no one seemed to notice or care how well they were doing. Since they were the area of strength on Monday, everyone noticed. To show you how much has changed in that arena, the QQQs have been red for four of the last five trading days which is the first time that has occurred since the December lows. No wonder everyone noticed the small-caps. Their beloved big cap tech stocks haven't been doing so hot.

It's very hard to be outright bullish here because of the indicators discussed above. But at the same time there was very little selling in the market Monday since the number of stocks making new lows did not expand and breadth did well as did the small-caps. So it's hard to be outright bearish either. At some point we'll get back to an oversold condition and sentiment will get more concerned than it is and we'll probably be set up for another rally.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.
TAGS: Investing | Stocks | Technical Analysis |

More from Stocks

Will Reaction to Fed Give Market a Needed Washout?

James "Rev Shark" DePorre
Sep 20, 2023 4:16 PM EDT

As Fed 'proceeds carefully,' the market could use a good flush to set it up for a bounce.

Powell Tries Hard to Hide His Dovish Side

Peter Tchir
Sep 20, 2023 3:47 PM EDT

Expect no Fed rate cuts, but for rates to hold higher for longer.

Investors Should Brace for a UAW Win

Bob Lang
Sep 20, 2023 1:15 PM EDT

Here's what to look out for as the auto strike continues.

I Just Can't Give Boeing the All-Clear Yet

Stephen Guilfoyle
Sep 20, 2023 12:17 PM EDT

This defense and aerospace stock looks brighter than its competitors, but it's still a tough jet to fly.

Market's on Hold, Waiting for Jerome Powell to Speak

James "Rev Shark" DePorre
Sep 20, 2023 11:22 AM EDT

The problem with trading in front of the Fed decision is that the reaction will be index-driven, and individual stock picking of little advantage.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 01:41 PM EDT CHRIS VERSACE

    Latest AAP Podcast With Helene Meisler!

    Listen in as the Action Alerts PLUS podcast talks ...
  • 09:07 AM EDT JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    The Most Common and Costly Mistake in Investing
  • 10:23 AM EDT PETER TCHIR

    August CPI, Sticky Inflation and the Fed

    CPI, in grand scheme of things, was a non-event......
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2023 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login