YOU ARE NOT ALONE

Yesterday, I mentioned how a few things bothered me about the recent market advance. Breadth was negative on the NAZ (-275) and barely green on the NYSE (+135) and the TRIN was a bearish 1.14 indicating stocks were being distributed on the day the DJIA closed at an all time record. The up/down volume on the NYSE was also negative with 820 million up vs. 869 million down.

Both Cooper and Revshark at realmoney.com are also showing concern about this market. Cooper said:

"Finally, the Dow scored a record closing high on Tuesday. Did a new age for equities dawn?
At this new high, it is interesting to note that the trade into big-cap, blue-chip liquid names was precipitated by concerns over rising interest rates and rising crude oil. Now that oil has been hammered and the Fed is our friend again and yields have gone south, will the trade into big-cap names unwind?

Despite the new record on the Dow, the rally marked what appears to be a break of interim support in the Russell 2000 and the Nasdaq.

In addition, down volume on Tuesday was greater than up volume. This is not the picture of a healthy advance, and is symptomatic of the masking of distribution seen at/near the end of advances. "

Revshark noted the following:

"What is it that is bothering me? The No. 1 thing continues to be the lame action in the individual charts. I can't find much I want to buy, and my feeling is that this is a sign that the buying that is driving the indices is suspect and not likely to last. If that is indeed the case, the smaller stocks that have been just treading water lately are going to break support.

Today we had an additional issue that caused me concern, which is that the bounce in the Nasdaq, which failed to recoup yesterday's loss, came on negative breadth. Also, a big drop in crude oil didn't seem to boost the action in consumer-related stocks to the same degree it did last week, when it was around the same levels. I'm growing more concerned that weak oil may be indicative of a weak economy and may not be a major positive."

Yes, interesting how Rev now looks at lower oil and lower rates as perhaps a preview of a slowing economy. I would be very careful protecting gains at this point and watching for what could be a nasty selloff. That downdraft in the middle of the day on Monday still bothers me as I have no clue as to why but just wonder when it comes back to bite.

I will be out for most of the morning as MTB (the bird) has a doctors appointment.