I saw someone comment that there wasn't much to say about the market's action on Tuesday, unless you were willing to talk about the meme stocks. Well, heck, I would say that if everyone is focused on the meme stocks, then let's take a look at what they ought to be looking at, instead.
First of all, I have said it before and I will say it again it: Those speculative stocks running as they are is ultimately not healthy for the market, because it is unsustainable. If you don't believe me, then feel free to go back and look at what transpired in the market in late January and February, because that is what happens to unsustainable speculation.
Tuesday's market once again saw the S&P 500 with a magnet around its neck at 4,200, the same level we have been at for six or seven weeks now. In the meantime, the cumulative advance/decline line has made a new high.
The number of stocks making new highs on the New York Stock Exchange finally increased. At least there are more than 400 new highs now, whereas last week there were far fewer, because we couldn't even get up and over 300 new highs.
Yet the Volatility Index spiked, almost from the get-go.
The put/call ratio chimed in at .66, which is the lowest reading since it was .65 on April 26. We also know that the market is short-term overbought.
I have been of the mind that we should get one more lift in the market this week, and I'm sticking with it for now. However, if there is one thing we have learned in the market in 2021, it's that when the market is overbought and sentiment gets too giddy we tend to have a pullback.
So, what else should we be focused on? Well, I know no one cares about Apple (AAPL) anymore, but I think it is worth taking a look at. It is a mega-cap stock that is in all the major indexes, as well as a host of exchange-traded funds, and it is currently down on the year and trading where it was last summer.
But the reason why we should look at it is because it is sitting right on an uptrend line that is very solid. By my count this is the seventh touch to that line, making it a good line. The more points on the line the better the line.
So what if Apple breaks? Heck, it has support all the way down, so it's not like I see it collapsing. What I do wonder is if a break of that support line would have everyone chatter with some level of hysterics about Apple breaking. To me, that is always a plus-hysterics. But my real concern would be if, it does break with any oomph, and even with hysterics, can it then get back over the line on a rally? Because, if it can't, it begins to weigh on the indexes over time.