The S&P 500 hasn't gone anywhere since late June. It closed at 4450 on the final day of the second quarter. We are now heading into the final weeks of the third quarter and the index closed Tuesday at 4461. So, if it feels as though we've done a lot of churning, it's because we have.
Would it surprise you to know that the beloved semis, using the SOX semiconductor index, are lower than where they closed on the final day of the June quarter? The SOX is down by 4%. But the (QQQ) s are up 1%.
In fact, if we look at a chart of the ratio of the SOX to Nasdaq we can see the semis have been incredibly lackluster since June.
You know what's up since the final day of the second quarter? The Bank Index. Oh it's only a percent or two but take a look at the Bank Index relative to the S&P: it's been bouncing along the bottom. I think the banks can rally but they are not going anywhere special.
All the same if we consider the amount of time folks spend chattering about semis vs. banks you have to admit those are some interesting statistics.
The most amazing thing about all of this is that in late June the yield on the 10-Year Treasury was just over 3.8% and now it stands at 4.25% and yet the major index (the S&P) is little changed.
What it really tells me is that the market is still just milling around. I would love to see a nice whoosh to set us up with some panic into the upcoming oversold condition (mid-month) but we can't seem to even get that.
The Overbought/Oversold Oscillator has meandered its way back to the zero line but it is not yet oversold. The Nasdaq's has gone below the zero line but it needs approximately another 3-5 days to get to an oversold.
The intermediate term should also be oversold within the next week.
There is something else curious, the McClellan Summation Index needs only a net differential of +600 advancers minus decliners on the NYSE to halt the current decline. Considering how poorly the Russell 2000 has acted in September I would have thought it needed +2,000 by now.
I would love to see the market come down to get us to that oversold condition. Will the very anticipated CPI report do it? I don't know.
I do, however, know that the Utilities clocked in their fifth straight green day. They haven't made much progress as they are now toying with that resistance at 875-880 but I find it impressive that they keep trying to eat through it. I remain positive on this group.
