In last week’s sentiment overview I mentioned some troubling signs were appearing on the horizon. For one, we were once again just below the 1400 level on the S&P 500 index.
But that this important technical junction coincided with wobbly results from indicators like the percentage of stocks above their short term moving average and the CBOE equity only put call ratio made me question the health of this rally.
Although I still think there is ample evidence of a significant long term market bottom, why watch hard won capital melt by riding the wave down when it is this obvious?
Today’s breadth was bad but not horrible. On the NYSE we had 2.5 stocks declining for every advancing. For the Nasdaq the numbers were slightly better but similar.
The big market tell tomorrow will be Apple’s (NASDAQ:AAPL) earnings release. Will it power the rally onward or will it put the kibosh on an already faltering one? The stock has run up well in advance of the news but fell today by almost 5%.
Apple has pushed the market’s recovery from the March lows, going from $120 to almost $170. But a healthy market is powered by a wide range of stocks.