Saturday, March 22, 2014

A Quick Look at the Market Tide

My chief market analyst is a bit cautious on the stock market.

The chart tracks all common stocks making fresh three-month highs minus those making three-month lows.  Back in mid-January, I became cautious on stocks because we were hovering at then-price highs and yet many fewer shares were participating in the strength.  That preceded the market tumble into early February.  

Now we see much the same thing happening.  On Friday we touched a price high in SPY and yet 847stocks made fresh three-month highs and 466 touched fresh three-month lows.  By way of comparison, we had 1626 new three-month highs on March 4th and only 101 three-month lows. 

Friday's high price in SPY was not confirmed by consumer discretionary shares (XLY); S&P 400 Midcap shares (MDY); homebuilder stocks (XHB); retail stocks (XRT); raw materials shares (XLB); consumer staples stocks (XLP); and healthcare stocks (XLV).  

NRK likes rising tides that lift all boats.  When she sees many boats not rising, she tends to question the tide.