• 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
    • Trifecta Stocks
  1. Home
  2. / Investing
  3. / Stocks

The Market's Splitting, and That's Problematic

Investors have shunned certain groups and latched onto others, and the bifurcation has created too many haves vs. have nots in the last few weeks.
By HELENE MEISLER
Jan 23, 2020 | 06:00 AM EST
Stocks quotes in this article: X, BA, CAT, DE, NTR, XLE, PEP, K

Yes, everyone is enamored with the big-cap tech stocks. It's easy to be in love with stocks that go up every day, or at least don't go down.

But do you remember a few short months ago when everyone loved oil stocks? Or the copper stocks? Or the industrials? Or what I refer to as the cyclical stocks (no one uses that term anymore, perhaps because I've heard recently that the business cycle is no longer boom and bust, so how can a stock be cyclical?)

Wednesday looked at U.S. Steel (X) , which is essentially falling off the bottom of the page. We looked at the banks and Boeing  (BA) as well. But have you looked at what I affectionately call "the animals" lately? That would be Caterpillar (CAT) and Deere (DE)  -- they both made their highs nearly three months ago.

Then there is energy. The (XLE) is down on the year. About the only good thing we can report is it's got some support not much lower than here.

The China trade deal is supposed to help farmers and grains, so why is Nutrien (NTR) , a fertilizer company, threatening to make new lows?

I know the semis are the new economically sensitive group. I am told this all the time. And quite frankly the tech stocks are where it's at. But for some reason, so are the defensive names like Pepsi (PEP) or Kellogg (K) . Yet, no one loves them very much.

I don't know why investors have shunned certain groups and glommed onto others, but the bifurcation is amazing. And it's problematic to me. I'm not saying every group has to perform all together all at once, but there are too many haves vs. have nots in the last few weeks.

What this market has typically done is, as soon as these divergences become too great, they start to rally the down and outers, which has kept the group rotation alive and well. Perhaps that will happen again, but something has to change. Right now too much money is pouring into the haves and out of the have nots.

The curiosity is that it hasn't found its way into the statistics much. Breadth has lagged, but only for the last three days. The new highs have dropped off, but not significantly. The new lows have picked up a bit in the last few days and the 10-day moving average is starting to rise again for this metric.

A proper correction would be healthy since it would reset the sentiment and shake out some of those weak hands. So far, we have not been able to accomplish that. But that doesn't mean it's not happening underneath. Because those charts above show us it is.

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 | Food & Staples Retail | Agriculture | Industrials |

More from Stocks

Can Generac Generate Enough Technical Power to Rally?

Bruce Kamich
Jun 29, 2022 11:55 AM EDT

Sometimes the fundamentals and technical indicators are on the same page and sometimes they are not.

Will Markets See Positive Fireworks Into the July 4th Weekend?

James "Rev Shark" DePorre
Jun 29, 2022 11:01 AM EDT

In the last 10 years, the three days in front of the July 4th holiday have been up nine times.

Carnival Traders Are Voting With Their Feet

Bruce Kamich
Jun 29, 2022 10:38 AM EDT

Let's review the charts and indicators.

Bed Bath & Beyond Goes From Bad to Really Bad: Here's How to Trade It

Stephen Guilfoyle
Jun 29, 2022 10:30 AM EDT

BBBY just released the firm's first quarter financial results. It reads like fiction.

Bearish Sentiment Is at Decade Highs -- And That's Very Bullish

Guy Ortmann
Jun 29, 2022 10:25 AM EDT

Support levels have held and need to stay in that condition.

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

  • 11:56 AM EDT STEPHEN GUILFOYLE

    Stocks Under $10

    Check out what's going on in the Stocks Under $10 ...
  • 12:04 AM EDT PAUL PRICE

    Two Good Signs -- Especially for Small-Cap Investors

  • 12:10 AM EDT PAUL PRICE

    More Insider Buying in American Woodmark (AMWD)

    American Woodmark , which I've discussed here fr...
  • 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