MLR - PMP 5/14/14
Major averages were roughly flat yesterday on mixed volume, although the NASDAQ suffered a distribution day, reversing down 0.33% on slightly higher volume. While the S&P 500 broke into new high ground, the tepid volume figures as well as action from leading stocks pointed to a market that is indecisive. Big caps, utilities, transportation, defensive, and cyclical stocks have helped push the S&P 500 into new high ground. But these groups are laggards and show the exhausted nature of the general market. Further, the NYSE advance-decline line is at a new high even while the NASDAQ Composite and Russell 2000 lag well behind and the NASSDAQ advance-decline line plumbs lower lows. Nevertheless, this QE manipulated market seems to be trying to push higher once again, but the rally is more of a "half-rally" given the lack of participation from more dynamic growth names.
Buyable set-ups remain far and few between, and as we wrote yesterday the most likely set-ups would be shakeout-plus-N type set-ups and bottom-fishing pocket pivots. With the market trying to push into new high ground, at least as far as the NYSE-based indexes are concerned, we would expect to see more stocks stepping up as potential leaders, but so far that is not happening. As well, the market is suffering from a dearth of "new merchandise" as newer, more dynamic and entrepreneurial situations are noticeably absent. While the MDM is currently on a buy signal, we would advise caution on the long side of this market.
This information is provided by Virtue of Selfish Investing, LLC (VoSI) is issued solely for informational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. Information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of available data. VoSI reports are intended to alert VoSI members to technical developments in certain securities that may or may not be actionable, only, and are not intended as recommendations. Past performance is not a guarantee, nor is it necessarily indicative, of future results. Opinions expressed herein are statements of our judgment as of the publication date and are subject to change without notice. Entities including but not limited to VoSI, its members, officers, directors, employees, customers, agents, and affiliates may have a position, long or short, in the securities referred to herein, and/or other related securities, and may increase or decrease such position or take a contra position. Additional information is available upon written request. This publication is for clients of Virtue of Selfish Investing, LLC. Reproduction without written permission is strictly prohibited and will be prosecuted to the full extent of the law. ©2016 Virtue of Selfish Investing, LLC. All rights reserved.