Tale of two markets....

IF you believe what Nasdaq is doing, then market looks super strong.

Nasdaq @ series of new all time high...

BUT SOX  a deeper component of Nasdaq is 12.62% lower than its high.

 This is a clear cut definition of this market, its a NFLX, FB GOOGL PANW market , these stocks are making new all time highs while SOX is struggling big time.

I have never seen a market environment, where one index like Nasdaq is in a runaway bull market while its most important component SOX lags badly.

Dow is 14.44% below its all time high, another deviation which i have never seen before is a Nasdaq only led bull market....

This is "highly troubling"

SO...the question is, what to expect going forward and what could be a good strategy.....

Going forward , this is not a season to have strong TAPE action...

It is extremely difficult to duplicate what has happened in stock prices of above listed stocks.

AAPL is expected to report this week, will it show a growth in profit like Google, that is left to be seen.

I see sporadic strength continuing till the end of earning season, but after that a pullback.

VIX is telling us that we are nearing a "top"

Anytime VIX is in 11 area , we are staring @ top of the market.

3 year low is 10.28, we did hit 11.77 , which is a 1 year low.

It is important to know what is a "historical norm "

History always guides us, when to be "super optimistic " and when to be "super cautious "

We may have reached the other extreme of this fulcrum. 

Good luck with your own analysis and comfort level.

BLOG does NOT give buy or sell.

Saleem

Posted in: Mixed