MarketSurge powers the charts in this video.
They say you have to pay special attention when the market doesn’t follow the usual seasonal patterns. We might be in such a situation right now. August and September in the second year after the presidential election are typically considered a weak period for US stocks. The Nasdaq 100 just hit new all-time highs last week after a brief dip below its 20-day moving average. Not everything is hitting on all cylinders. There are plenty of mid and small-cap stocks under pressure while select mega-caps are carrying the load. AAPL was the big difference maker last week for QQQ. Tim Cook finally announced that Apple wants to commit to investing heavily in US manufacturing. This was enough to lift the stock more than 10% higher. Palantir (PLTR) crushed earnings estimates again and made new all-time highs. GOOGL is making higher lows and higher highs above its rising 20dma. TSLA gained 10%. Those moves were enough to mask the chopiness and rising volatility under the surface. The saying that bull markets correct through sector rotation was proven right once again. When a few leading stocks take a breather to pull back to their 20 or 50-day moving averages, other stocks perk up and keep the indexes relatively unscathed.
We are in a stock picker’s market. There are still plenty of stocks that are breaking out to new highs after earnings, then consolidate for a short period of time and continue higher. There are also plenty of stocks that gapped up and then quickly faded or were completely crushed this earnings season – just look at the damage in cybersecurity and software stocks lately. This market is picking its spots.
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