• 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

Market Indices Continue to Hide Crazy Rotational Action

Fundamentals and valuations are secondary to shifting money into certain sectors.
By JAMES "REV SHARK" DEPORRE
Apr 16, 2021 | 04:41 PM EDT
Stocks quotes in this article: HON, MSFT, HD

You would not know by looking at the S&P 500 or DJIA, but it was an absolutely miserable week for a great many stocks in the market.

While some big-cap names such as Honeywell (HON) , Microsoft (MSFT) , and Home Depot (HD) moved steadily higher, hundreds of small-cap names broke down and struggled to hold support.

The trading action was some of the most inconsistent that I've seen in many years. It was as if there were two totally different markets operating at one time. One was a euphoric bull market, and the other was a bear market struggling to find support.

To a great degree, the action was disconnected from fundamentals. Earnings in the financial sector were generally good, but it is going to be interesting to see how some of the big-caps that have run up, deal with their reports. This is an ideal setup for some "sell the news" action in individual stocks.

The big issue going forward is how does this action resolves itself. The large-cap names and the S&P 500 are overbought and ready for some corrective action. If they do correct, then what happens to the stocks that are already in a bear market? Do they sink further, or do they benefit from some rotational action?

I suspect that it is going to be a very mixed bag, but there will be more focus on earnings, and that should drive some action in individual names.

Many traders are very frustrated this week. We had some of the best stock-picking in years to start the year, but for nearly two months now, picking stocks is not working very well. This action is driven primarily by large flows by big funds into large-cap names. Fundamentals and valuations are secondary to shifting money into certain sectors.

The good news is that the one great certainty about the market is that conditions will change. The timing is always the hard part.

Have a great weekend. I'll see you on Monday.

(Honeywell and Microsoft 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.)

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

At the time of publication, Rev Shark had no positions in any securities mentioned.

TAGS: Earnings | Indexes | Investing | Markets | Stocks | Trading | U.S. Equity

More from Stocks

Fear and Anxiety on Wall Street

James "Rev Shark" DePorre
Aug 17, 2022 4:41 PM EDT

We've got fear of missing out and wariness that the market may keep running away to the upside.

Peabody Is Glowing Hot

Mark Sebastian
Aug 17, 2022 3:19 PM EDT

Here's how to play Peabody Energy as it looks like it could fire up over $25.

It's Hard to Say What's Cookin' at Weber, Though It Smells Like a Short Squeeze

Jonathan Heller
Aug 17, 2022 11:30 AM EDT

The grillmaker's stock has traded wildly and heavily at times, most recently this week after it posted its latest results on Monday.

Dour Day Shows Why I've Been Raising Cash Into Strength

James "Rev Shark" DePorre
Aug 17, 2022 10:44 AM EDT

I'm not aggressively bearish, but just waiting for better technical conditions.

Target Badly Misses the Mark, Which Sets It Up for a Bearish Bet

Stephen Guilfoyle
Aug 17, 2022 10:30 AM EDT

The big retailer's second-quarter results were atrocious and so is its balance sheet, which makes it a stock not to buy right now.

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

  • 02:23 PM EDT STEPHEN GUILFOYLE

    We're Cleaning Out This Retailer From the Bullpen

    Check out the latest moves in TheStreet's Stocks U...
  • 10:24 AM EDT JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    To Improve Your Trading and Investing, Spend More ...
  • 08:44 AM EDT PETER TCHIR

    CPI Beats Expectations, But Maybe Not the 'Whisper'?

    Slightly better-than-expected inflation across the...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2022 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