This time is different. How many times have you heard that with regard to the market and how many times have you cringed knowing it is never different? Oh it might not be exactly the same but it will rhyme in some fashion, won't it?
But this time is different. The S&P has been milling around for seven straight trading days, basically since we reached that short-term overbought reading last week. That is actually perfectly normal. It's the way markets should act. What is different this time is that the stocks that are typically market leaders -- the ones that influence the big cap indexes so much -- have not been leaders.
Look at Facebook (FB) for example. In late April as it was gapping higher on earnings while the rest of the market was rolling over. In late July it was not nearly as spectacular but it was once again up at the highs along with the S&P.
Now look where it is: 15 bucks off the high. In percentage terms that is not much but you have to admit, that's different, isn't it?
Now look at Alphabet (GOOGL) . Late April it was on a tear, having rallied 100 points in three weeks -- while the rest of the market rolled over. In late July it gapped up on huge earnings -- sure it leaked thereafter -- but do you remember the excitement when it was up 100 points on the day?
Now look at it: It hasn't even been able to muster a 100 point rally in a month. It's not far from the highs, but you have to admit, it's different, isn't it?
Now let's look at IGV (IGV) , an etf to be long software stocks. Late April it was making new highs (again the rest of the market was rolling over). In late July it was up near the highs while the rest of the market was rolling over.
Now look at it: It has barely recovered from the early August decline, and it is still under the mid August and early September highs. This is different.
This is probably why the major big cap indexes are stalled, because some of the biggest components are stalled or lower than they were at prior highs. Typically the indicators, which are mostly made up of breadth, roll over before the indexes because the troops fall first and the generals are the last ones standing. Right now the troops are stalled and the generals have been stagnant.
In the meantime the American Association of Individual Investors (AAII) bulls are now at 35.3%, up from 21.75% a few weeks ago. They were 38.4% in July so similar to the Investors Intelligence readings they are no longer scared and are moving toward complacency.
The put/call ratio was rather high on Thursday (112%) which helps the 10-day moving average rise. The 10-day moving average of the equity put/call ratio had its first tick up from under 60% on Thursday.
A week or so ago, as we headed into the overbought reading it felt as though we would never go down again. Now it feels like we'll never get out of this tight range. Eventually the market will shift. That is not different.