Market Health Tracking

How has NVDA been impacting the overall market according to PuddinHead42?

RE: Factset. Andy, I will have to check that out. Thanks

5/29/24 Update.

DJIA down 1.1%, falls farther below 50dma. Russell down 1.5%, MDY down 1.3%, S&P down 0.7%, Naz down 0.6%

On the Nasdaq, breadth had actually turned positive in recent days. Not on Wednesday. Falling issues beat gainers by nearly a 3-1 ratio. Also, the 10-day moving average of the Nasdaq’s advance-decline line peaked in the middle of last week and has begun to soften.

Market breadth was terrible.

NVDA is no longer hiding the weakness in the broad market.

We have had a number of “one-day-corrections” this year, and then a slightly longer, slightly deeper correction in April, but no 10% correction yet. This is feeling like it will be more than a day or two, but PCE on Friday could end that or accelerate the decline.

We just take it day by day.

IBD shows 3 distribution days on the Naz and 3 on the S&P. Recommended exposure is 60-80%. Some caution advised.

Inverse ETFs like RWM, SPXS, SQQQ are turning positive.

2 Likes

Thanks for posting your updates.

Many moons ago there was a trader on TMF who used to trade an Index ETF based on the Bullish Percent Index, which is a breadth indicator.

He used the $BPCOMPQ (that’s the stockcharts.com symbol) and if it was above the 10 and 20 day MA’s he would be mostly invested, lighten up if it fell below the 10 day, and go mostly cash if it went below both MA’s. He didn’t short. I’ve always been intrigued by this method, and have looked at it often but never done it. I may start trying it with some money that I can afford to play with.

It looks on the verge of falling below the 20 day MA, so it is showing pretty bearish at the moment, similar to what you’ve said.

2 Likes

5/30/24:

Markets down: DJIA down 0.9%, S&P down 0.6%, Naz down 1.1%. With volume up on S&P and Naz, each added a distribution day. Now each has 4 in a relatively short period. But, in opposite action, IWM, RSP, were up, and QQEW was down about half that of the QQQ, indicating smaller stocks finally had the advantage (NVDA off 3.77%, MSFT off 3.38%). Small caps probably helped by a dip in the 10-year rate.

We are still in a power trend.

Enterprise software stocks crushed. CRM outlook bad and dragged stocks like NOW and CRWD down with it. But after hours, ZS up 16% on earnings.

2 Likes

Just a little side note I found from listening to IBD weekly. You can see how the sectors are rotating here, they will even send you a weekly report. It might be useful.

https://www.sectorspdrs.com/

Andy

2 Likes

I’ve always appreciated Julius de Kempenaer’s work in Relative Rotational Graphing. Especially how dynamic and interactive it is. Stockcharts does a great job supporting it.

Lakedog

2 Likes

I forgot to post this weekend, so here it is.

Remember “sell in May and go away” :wink:
Naz up 6.9% in May
SPY up 4.8%
DOW up 2.4%
Russell 2000 (IWM) up 5% in May.

The stock market rally started the short week in decent shape. The Nasdaq topped 17,000 for the first time on Tuesday, even as the laggard Dow Jones undercut its 50-day line. But then Salesforce, Dell and other earnings losers hit techs hard. The S&P 500 nearly tested its 10-week line Friday before rebounding higher.

Despite Friday’s afternoon bounce, the stock market rally enters June in a weaker state than the broad advance for much of May. The indexes are at least testing key levels while a number of leading stocks have come under pressure or worse.

The Nasdaq composite got support at the 21-day exponential moving average as it ended the session essentially flat.

S&P tested sliced through 21dma and then bounced off the 50dma to finish above the 21dma, a sign that big institutions started supporting market after lunch. Also, algos seem to fight it out near trend lines, bearish algos want to push down and bullish want to push up. Once one side starts winning, the other side gives up and the move can be big.

Mike Webster: Thursday a week ago was an outside day and downside reversal ending near the lows, so today’s action was an important counterbalance to that.

Cybersecurity leader CrowdStrike (CRWD), Semtech (SMTC) and Samsara (IOT) are among the noteworthy firms reporting in the coming week.

SMCI has been falling below 50dma on strong volume, a sign of weakness.

2 Likes

6/3/24 - markets up as expected after Friday’s reversal…sort of.
S&P gapped up a little bit then fell again like yesterday. Today it stopped at the 21dma and finished the day up 0.1%.

Naz followed the same pattern, but did not get too close to the 21 day before it gave us an upside reversal. Now we want to see the indexes keep their lows above the 21dma as the next sign of strength

IWM and MDY did not fare as well, closing negative, near the lows and on the 50dma. The breadth is not with us.

The ISM manufacturing survey, which hit the wires at 10 a.m. ET, came in at 48.7 for May. An index below 50 signifies contraction in the nation’s factories. According to Econoday, Wall Street had expected the ISM to edge up to 49.8 vs. a 49.2 reading in April. This dropped interest rates and made investors worry about industrials.

OPEC+ decides to keep oil production cuts in place longer. Investors think this means a dimmed outlook on world economic growth. This caused heavy volume declines in FANG, TDW, OII, EOG.

The market rally is struggling somewhat, even with Nvidia stock masking some of the weakness. It wouldn’t take much for the Nasdaq and S&P 500 to rev back to record highs. If so, a number of stocks would flash buy signals while others could set up promptly. But it wouldn’t take much for the Nasdaq and S&P 500 to break below their 21-day and 50-day lines.

2 Likes

Stay away from software stocks the odds are not in anyone’s favor.

Andy

The major stock indexes closed near highs for the third straight session in the stock market Tuesday. But small caps took another hit, and several top-rated growth stocks struggled below the surface. IWM closed down 1.3% and below its 50dma again, this despite lower ten year yields. This points to weak breadth.

The JOLTS report showed a weakening job market and caused the bet for a rate cut in September to rise to 67%.

NVDA closed up, but none of the baby ducks are following. AI/Datacenter stocks taking hits,

Infrastructure stocks taking hits. Mining and energy down.

CRWD up 6.75% after late earnings, need to see how it reacts in the full market, but it seems to be bucking the enterprise software trend.

This is a tricky market. The Nasdaq and S&P 500 are holding near highs, above their 21-day moving average. But there’s a lot of underlying weakness, including in leading stocks.|

1 Like

6/5: Markets got healthier today on week job number, which make people believe the Fed will be more likely to cut this year.

Naz was up 2%, over a (Jesse Livermore) big round number of 17,000. Vol was up, but still below average. Finished at the top of the trading range (sign of strength). All-time high. Growth stock feeling their oats. Breadth was ok but not great.

S&P also at an all-time high, though vol was below average and below yesterday.

IBD “The suggested current outlook for active investors got upgraded to a recommended level of exposure in growth stocks to 80%-100%, up from 60%-80%. We are still in a power trend.”

6/6: sleepy day, S&P an Naz touch new highs but settled a little lower. Perfectly normal after yesterday’s big workout. Russell down 0.7% and back down to the 50dma. Just teetertotter that every other day :wink:

The S&P and Naz continue to have closing prices above the 21dma, that is when we push on the gas.

6/11/24: Naz up 0.9% (thanks Apple), S&P +0.3% and Russell 2000 small caps down 0.4%.

The market rally is definitely mixed, which is not ideal. But there are still a number of stocks that are working, flashing buy signals or setting up.

Fed speaks Wed. I predict nothing before December meeting, but some important measures are showing some economic slowing, so who knows. Which is to say, the market may be disappointed and have another 1-day temper tantrum.

1 Like

6/12/24 - market very strong, power trend in effect.

Market up nice on favorable inflation numbers in the morning. Fed speak throws a little water on the fire, but markets close at highs. There were some nice breakouts.

||○ The Nasdaq closed 1.5% higher and had been up more than 2% before it pulled back in the final half-hour of trading. The S&P 500 rose nearly 0.9% after sellers swarmed in the final 30 minutes.|
||○ The Russell 2000 rose 1.6% but halved a 3.2% morning burst. The index, nonetheless, closed back above the 50-day moving average.|
||○ Volume rose on the Nasdaq and NYSE from Tuesday. It was only the second day that NYSE volume is above average this month.|
||○ The Nasdaq closed 7.4% above its 50-day line, above the 5-6% level that starts looking extended. The tech-heavy composite could keep getting more extended, but the risks of a pullback would increase as well. Nvidia stock is 31% above its 50-day line, though it’s gotten above 40% a couple of times in the past year.|
||○ Investors can be adding exposure, but do so gradually. If you have heavy exposure, you can stand pat or simply reshuffle your portfolio|
||○ Federal Reserve policymakers guided to just one Fed rate cut this year, defying market expectations for two cuts. That’s based on the dot plot of individual forecasts, with four members predicting no moves at all in 2024.|