Today we had the S&P 500 add 0.15% and the NASDAQ 0.50%; both were in the red much of the first half of the day but rallied late. Beaten down tech stocks and small caps had a bounce – they were due. At this point the NASDAQ is just trying to bounce back a bit from very oversold levels while the S&P continues to carve out a range it has been in for 2 months.
If you are curious Chris Kimble, who runs a charting service, was noted by Yahoo Finance as saying there has only been twice in the past 35 years when the NYSE is hitting new high as the Russell 2000 falls below the 200 day moving average – and both those years are pretty infamous (2007, 1999). Bad things happened right after; now this is a very small sample size but those were 2 major peaks so if 2015 turns out badly … it certainly will be an interesting indicator to watch go forward.
Apple (AAPL) fell on news that it is close to paying a record $3.2 billion for Beats Electronics, an expensive foray into music streaming and headphone gear. Congrats to Dr. Dre for striking it rich again. After breaking out of the top of the flag Tuesday we’ve had 3 down sessions so nice headfake there.
Netflix Inc (NFLX) shares rose after the company increased the price of its most popular video streaming plan by $1 a month….however you can see from the chart it is like a lot of NASDAQ charts – lost in space.
Even when you think these safety stocks are running out of steam they continue to make a move like 1999 internet stocks – see boring old General Mills (GIS).
That said, the run in utilities might be getting close to an end – we are starting to see some signs of distribution here unlike consumer staples which are still chugging. If you want something to short in your portfolio as a hedge against long positions, something like XLU in the $43 area, with a stop at new 52 week highs ($43.50) sure looks like a low risk foray. It has come a long way in a short time.
Have a good weekend, we’ll see you on the other side.