Maybe you have bad breadth

October 30, 2022

There are 30 stocks in the Dow Jones Industrial Average.

This is the most important stock market index, both currently and of all-time.

In case you missed my explanation, you can catch up here.

Of the 30 stocks, 5 of them are already at New All-time Highs (2 more that are no longer in the Dow also closed at New All-time Highs).

And several more Dow Components are just a few percentage points away.

New all-time highs are NOT a characteristic of downtrends.

An expansion in new highs is NOT weak breadth.

Here's a Dow component that has been basing for a while. Premium Members of ASC will be very familiar with this one:

And even some of the weaker Dow components are not acting too bad, as the news headlines and glorified gossip columns would have you believe.

Look at JP Morgan, which is not only an important Dow component, but I would argue is one the most critical market bellwethers.

Looks like a healthy Gap fill to me.

And speaking of market bellwethers, I would put Caterpillar right in there with JPM as a key gauge for equities:

Caterpillar isn't acting like we're in a bear market.

And neither is Apple, the world's largest company by market cap.

Former resistance is turning into support.

Seems like classic polarity within an ongoing uptrend to me:

What do you think people are so angry about?

Is it that they're not taking the time to go stock by stock, chart by chart, and watch too much news instead?

If it bleeds it leads. Is that how you want to live your life?

Go for it.

But I won't.

I only trust one thing: Price.

The rest is bullshit designed to confuse the weakest minded.

I'm too old for that crap.

Stocks are going up and we've been buying the best ones.

What's wrong with that?

Let me know why that's the wrong approach for Q4.

- JC

Also See:

Filed Under: