Perhaps the near-term rise in rates makes it difficult to grasp, but the US benchmark yield is actually chopping within a broader corrective phase.
Before we dive into the charts, I want to make two things clear:
One, I am not an Elliottician or an Elliott Wave specialist on any level. And two, if you give five Elliotticians the same chart, you’re likely to get five different wave counts.
Nevertheless, my journey to earning the CMT designation exposed me to the Elliott Theory, and I find it prudent when examining the US 10-year yield.
Stock market volatility is at the highest levels since October.
The majority of stocks are NOT in uptrends.
This market is NOT like it was last year.
In fact, coming into today, the majority of stocks on the NYSE are down for the year. Also 2/3rds of the stocks on the Nasdaq are negative for the year.
Go and count for yourself.
You'll quickly see that the majority of stocks in the Large-cap Nasdaq100 are down this year. Same for the Small-cap Russell2000 Index and the S&P Mid-cap 400.
Different markets call for different strategies.
Here's the $VIX hitting levels this week not seen since Halloween:
But today's chart of the day really shows this well, reiterating why it's so important to adapt to changing markets.
Here is the S&P500 with a line plotted below it. This line represents the percentage of stocks in the index that are in longer-term uptrends, but are NOT in short- to intermediate-term uptrends.
Welcome back to Under the Hood, where we'll cover all the action for the two weeks ended April 12, 2024. This report is published bi-weekly, in rotation with The Minor Leaguers.
What we do here is analyze the most popular stocks during the week and find opportunities to either join in and ride these momentum names higher, or fade the crowd and bet against them.
We use a variety of sources to generate the list of most popular names.
There are so many new data sources available that all we need to do is organize and curate them in a way that shows us exactly what we want: a list of stocks that are seeing an unusual increase in investor interest.
In today's Flow Show, me and Steve Strazza took a look at some potential directional bets, but we both agreed that the right trade for today is one that would benefit from some sideways trading action.
With the broader markets looking a bit indecisive here, making a strong directional bet (in either direction) feels like a high-risk proposition. But there's a big cap name currently stuck in a range that is offering us nice options premiums to bet on further sideways action. We'll likely have to hold through an earnings event to earn our profit, but with a defined risk and a large margin for error, I like our chances.
There is a big theme going on right now - and that's the inability for important indexes to get above their 2021 highs.
You're seeing it at the individual stock level, you're seeing it across specific sectors and industry groups, and you're definitely seeing it in the S&P500 and Nasdaq100 Equally-weighted.
These indexes below eliminate the excessive weightings in certain stocks and sectors and equally-weight all of its components.
Look at both of them still stuck below their 2021 highs: