STTG Market Recap December 10, 2013

It was another quiet session and sort of the exact opposite of yesterday; today the market gapped down and stayed in a narrow range - whereas yesterday the market gapped up and stayed in a narrow range.  The S&P 500 fell 0.32% and the NASDAQ 0.20%.  Most of the action was in very specific niches of the market, such as social media.   News flow remains quiet.  Next Tuesday and Wednesday the Fed has its last meeting of the year and some media types are saying they might taper but one would doubt Bernanke would do this at the end of his reign and just ahead of the holidays.

The indexes remain in the same position they have been of late...

spx

nasdaq

However it is worth noting the divergence in breadth - the NYSE McClellan Oscillator has remained mostly below zero for nearly 2 months.  Normally this is a negative but in the quantitative easing market it appears a lot of our secondary indicators don't mean as much as the flood of money into the system overwhelms all else.

NYMO

 

Social media was on fire as Twitter (TWTR) hit a new high in its short life; the stock is extremely expensive on every metric but right now it has the market's attention.

twtr

Also headed up was Yahoo (YHOO) which has quietly had a very good year...

yhoo

Facebook (FB)....

fb

...and Google (GOOG)

goog

After the bell MasterCard (MA) announced it is splitting its stock for the first time since it went public 7 years ago.   A stock split does nothing but reduce the share price while increasing the share count by a like amount but for some reason investors get giddy about it - the stock is up 3% in after hours.   MasterCard also is raising its quarterly dividend by 83%.  The stock split is 10 for 1.

ma

We are not the only one noticing the breadth divergence.  Over at SentimenTrader.com they have this interesting blurb:

What's notable about our current situation should be obvious from the chart.  While stock indexes are hitting new highs, the momentum of breadth has slowed materially.  The Summation Index is below 200, about 85% below its prior peaks.  The Oscillator is actually negative. This is highly unusual.

sentimentrader

Comments

  1. Posted by Anthony Alfidi on December 11, 2013 at 2:21 am

    Consider replacing that oscillator with measures of money flows. The WSJ's Market Data Center tacks them. The ICI's weekly flow tracking for mutual funds is also a good supply/demand measurement.

  2. Posted by Blain on December 11, 2013 at 12:21 pm

    The Oscillator is from SentimenTrader who is a partner of ours. They offer a nightly newsletter and the chart you are referring to came directly from their latest issue. I thoroughly enjoy the service and recommend it I was on my trader tools. :)