This Is Not Investment Advice
The Market Right Now - If We Strip Out AI Then What
Below is the Nasdaq General Market Indicators after last week’s close:
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It is quite obvious the Daq is under heavy Distribution (regardless of what is said on CNBC), there has been little to no recent strong upside Volume, and the Put/Call Ratio (granted tertiary for being actionable) is exuberantly low at the moment. But - does that mean the entire market is total crap?
Let’s take a look at four signals we can use that get us at least a little bit extended away from purely AI to see what is going on.
RSP
HOOD
IBKR
SK Hynix
Thoughts and observations:
Market as a whole, strip away NVDA/ORCL/AVGO/etc. related events and drama, is not in absolutely terrible shape or behaving in an awful manner right now as measured by RSP (equal weighted Spooz) . . . . that said four straight weeks of Distribution (rising each week actually) heading into Thanksgiving followed by a much Lower Volume bounce since . . . . so make what you want of that to me it is affirming of a cautious and prudent approach and avoiding being pulled into any chasing “because you might miss out on everything” . . . .
HOOD Acc/Dis rated D- currently by Investor’s Business Daily this thing is nearly 100% retail and perhaps our best single proxy for retail appetite and behavior . . . . closed last week below 10 Week EMA on rising Volume . . . . looks to me sitting on the fence here after the explosion of giddiness in September it has come back down to Earth a lot . . . . not the end of the world here but is that extreme retail MOMO magic in the front or rear view mirror?
IBKR perhaps a proxy for let’s call it retail on steroids looks weaker than HOOD and struggling to try and hold on to 10 Week EMA with little to no recent upside Volume . . . . . .
SK Hynix, in part representing the tip of the spear on high tech spending, with a monstrous rush Up in Sep/Oct but check the two very High Volume weeks with both closing way in the bottom half of the range just as market switched to Risk Off before Thanksgiving . . . .
All in all jives with my cautious and prudent stance . . . . market outside of AI is doing fairly well actually but if anything all of this suggests yet again no reason to chase or be in a rush to get super extra Long in my humble opinion . . . .
Higher Time Frame Money Flow collectively on these is not bone crushingly bearish but most certainly not indicative of strong and growing Accumulation or Up/Down Volume . . . .
Boring patience and prudence . . . .
