Two weeks ago, the market -- and by the market I mean the major indexes -- was rallying and the folks I know who prefer to trade small caps were complaining daily that their portfolios were mostly red. One person even used the term "bear market" to describe what he thought was going on in the market.
Fast forward to Monday and the folks who have portfolios that lean to the big-cap side of the ledger were complaining that their portfolios were not enjoying the rally. It may be slightly different, but the either/or market remains intact.
From what I have seen the last few days have been about money flowing into all the speculative plays that were so hot up until mid-February. They have spent two months correcting, dripping, and now folks seem to have decided it's time to like them again.
So, that means the industrial stocks, which have been terrific these last few months, reversed on Monday.
The transports had similar action.
The banks stayed green, but here, too, you can see the action was uninspiring as the SPDR S&P Regional Banking fund (KRE) closed on the low of the day.
Yet despite all of this, Nasdaq saw 86% of the volume it had on the upside. Recall last Wednesday Nasdaq saw 89% of the volume on the upside. Those are the types of readings we have not seen since January and February, prior to the high in the speculative names.
In picture form, you can really see it. The McClellan Summation Index for Nasdaq using volume has been a straight line lower for two-plus months. That mid-February high saw this indicator turn south and despite the rally since the early March low it has continued on its path lower. That is until Monday.
You cannot see it on the chart yet, but it stopped going down. It will now require a net differential of a net negative one billion shares (that's up minus down volume on Nasdaq) for it to turn south again. That's not hard considering last Tuesday saw a net negative of 2.2 billion shares, but this is the first time it has done this in months.
There is something else that hasn't happened since mid-February and it too occurred on Monday. The put/call ratio was .66. That is the lowest reading since Feb. 22. To me, that goes along with the speculative stocks folks are happy to speculate in calls the way they were not for the last two months.