he pressure came off the market uptrend Friday, as the S&P 500 scored a new high.
The Nasdaq led with a 0.6% thrust but fell shy of a new high. The S&P 500 and the Dow Jones industrial average advanced 0.5% and 0.4% respectively, as they notched new highs.
Setup Timeout Error: Setup took longer than 30 seconds to complete. Autoplay: On | OffVolume fell on the Nasdaq and the NYSE. Still, the action changed IBD’s market outlook to a confirmed uptrend, from uptrend under pressure.
The distribution-day count remains high (6&4). … Caution is in order despite the improvement in market conditions. Why? The new high on the S&P 500 came in timid volume. A change in a market’s character should have an emphatic quality. …
By today the distribution count was down a bit more to 5-Naz and 4 for S&P.
With the congress going on break, there might not be much political news, but earnings season is here and Netflix showed that market will still buy good stocks.
Caution is in order despite the improvement in market conditions. Why? The new high on the S&P 500 came in timid volume. A change in a market’s character should have an emphatic quality.
Do you know if that volume number is seasonally adjusted? We are in the mid summer break. If it is not adjusted, it could be hiding a lot of pressure.
Why didn’t someone tell me on Thursday or Wednesday?
Rating [CMG]: Don’t Buy Don’t Buy!!
Not losing money is always a good idea but the power of positive thinking might help you make money off the same circumstances. I’m not talking buying the dip (in the restaurant or in the stock market) but thinking outside the box. There are dozens of fast food chains and tens of thousands of restaurants and they all must comply with safety regulations but there are only a few businesses that cater to this need. Neogen Corporation (NEOG) has been a growth stock for over 20 years and it is currently my largest position. It pays no dividends but it is a great stock for selling covered calls. At this time my IRR is almost 30%, 2/3 from stock price appreciation and 1/3 from selling covered calls:
An analyst came on CNBC yesterday saying this was not a repeat of the e-coli problem from 2015. He said this was a case of neurovirus which isn’t unusual in restaurants and though the optics are terrible, this was not a repeat of the prior problem.
Worldwide, noroviruses are thought to be the most common cause of acute gastroenteritis (diarrhea and vomiting illness).
On average, noroviruses cause 19 million to 21 million cases of acute gastroenteritis in the U.S. per year, according to the CDC. The norovirus was originally called the Norwalk virus, after the town of Norwalk, OH, where the first confirmed outbreak happened in 1972.
Because there are many different types of noroviruses, exposure to one type may not protect you from other types.
While they can strike year round, they’re more common in the winter, says Edward Gaydos, DO, a pediatrician at the Cleveland Clinic. (Norovirus is also called the “winter vomiting bug.”)
“You’re miserable for 1 to 3 days,” says Gaydos. “It’s usually an abrupt onset and a quick recovery. It’s a nuisance, but it’s not something to panic about. Most people will do fine with it.”
Noroviruses are sometimes called food poisoning, because they can be transmitted through food that’s been contaminated with the virus. They aren’t always the result of food contamination, though.
Do you know if that volume number is seasonally adjusted? We are in the mid summer break. If it is not adjusted, it could be hiding a lot of pressure
This is all relative to near term volume. It is preferred to see new highs on volume larger than the previous days to show big institutions are still buying up and therefore likely to push the market up more. If we were to hit a high on a big gain but very low volume, that would be a yellow flag, not many people really buying.
For individual stocks, the rule of thumb is that during the day of the break out you want to see volume 40% higher than the day before to really give you confidence the big boys are buying. Part of the theory is the that institutions can’t buy all the shares they want the first day, but you can. So the strong volume will suggest they are coming back for more later, but you have your full share and can take the ride up.
From today: Technicals improved Thursday as the July 6 distribution day on the Nasdaq fell off because of price gains.
The S&P 500 and the Nasdaq now have four distribution days each, a sizable load but not enough to cause concern.
distribution days are usually dropped for time, but I had not heard the “volume” excuse before. Of course, when you are in a correction and then get a confirmed breakout into an uptrend, all the distribution days are dropped.
From today
Down to 34 distribution days for Naz and S&P. IBD’s definition of distribution remains this: Either the Nasdaq or the S&P 500 must fall a minimum 0.2%, and volume must rise vs. the prior session. For the S&P 500, IBD uses NYSE turnover. (NYSE volume fell Wednesday.)
the technicals remain generally favorable. While winners nearly matched losers on both main exchanges, the general direction of the advance-decline line for both the Nasdaq and the NYSE is up, with the Nasdaq’s line trying to move above a five-month sideways range. In a healthy market, more stocks rise than fall.
The new-highs list remains robust, and many companies reporting solid results or favorable news are rising past new buy points.
Volume fell on both major exchanges. The S&P 500 shook off the June 29 distribution day because of time. After five weeks, a distribution day is no longer relevant to current conditions. … On Thursday, the building sector grabbed the No. 3 spot among 33 sectors. This is the first time the building sector made the top three this year.
Some building stocks did well.
Insulation provider Installed Building Products (IBP) broke out with a 10% gain. The base was third stage, which carries more risk than earlier bases. … LGI Homes (LGIH) advanced 2.4%, bringing the stock to as high as 19% above its 40.57 buy point. IBD research identifies a 20% to 25% gain as a profit-taking zone.
Meanwhile, price-gap moves appeared on the upside and the downside, boosting Arista Networks (ANET) …
Amid a disappointing reversal, perhaps the most significant thing the stock market did Tuesday was what it didn’t do.
Setup Timeout Error: Setup took longer than 30 seconds to complete. Autoplay: On | OffThe S&P 500 climbed to a new high past 2,477 at midday as it tried to clear a nearly two-week span of dull, horizontal price movements. But moments later, the index slid right back into its flat trend, forsaking the chance to hold at new highs.
The S&P 500 closed with a loss of 0.2%, while the Nasdaq composite also made a bearish reversal. The Nasdaq, which had been up 0.6%, fell 0.2% as well.
Losses were minor, but the way in which they surrendered gains was disheartening. Volume rose on the Nasdaq and the NYSE. That’s a sign of institutional-sized selling. In fact, the day’s results left the Nasdaq and S&P with a new distribution day, a second bad sign.
That’s a total of five distribution days for the Nasdaq — a bit much, especially for a market stuck in a rut. However, among those five instances of heavy professional selling, the worst decline was the 0.6% drop on July 27.
Yesterday we hit distribution day 6. Unless we have low volume or a reversal to the positive, this would be Naz dist#7, and given the magnitude it should get IBD to declare an “official” “market in correction”.
