Drip…Drip…Drip
The piece-by-piece,
Chinese water torture continued, with volume again just hovering around average
levels.
The last time the Nasdaq could cobble
together three straight updays was Sept. 1.
The most astonishing statistic I’ve
seen recently is the Investor’s Intelligence set of data from last week.
According to II’s survey, the
percentage of bulls last week rose to 55% from 51% the prior week.
It used to be that a level of 55% to
60% represented a level of excessive optimism and a time to be wary of a market
top.
The high II bull number and the lack
of blowout downside volume say that sentiment remains too complacent for the
market’s own good.
Old bulls die hard. Very hard.
A number of the builders, a
top-performing group, have now paused for three weeks.
As I mentioned Monday, this is the
sort of group that you would expect to be liquidated if the market sniffed
recession, as opposed to slowdown.
In the group, Kaufman & Broad
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and Centex
(
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Traders with an intermediate-term
orientation should remember, however, that roughly four out of five stocks
decline in a bear market.
And while only the Nasdaq has put in
the 20% decline associated with a bear, the S&P has already fallen as much
as 16%, meaning that the decline is not just in tech.
Meanwhile, as the Comp and 100 both
print their second lower low in the past two weeks, some bells are putting in
higher lows.
EMC
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(
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Cisco
(
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bell over the past four weeks, and a market outperformer over this span,
continued its solid action, off just a minor fraction.
Of minor note will be the test
going on in the semi equips.
Here, stocks such as Novellus
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Teradyne
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lows.
Although this group is miles and miles
away from offering low-risk entry for the position trader, their action does
offer value to the market observer, seeing as how the stocks paved the way for
the selloff in tech.