31Jul11:34 amEST

Lonely at the Top

We have a bit of a tug-of-war in the market today, as dominant earnings winners like AAPL AMZN FB (though GOOG is soft) seek to offset small cap weakness (IWM is down 2% as I write this even with the indices off their morning lows), as well as assorted other fades. 

Headed into what is often a choppy, if not outright volatile and bearish, time of year for markets the next few months, it will be fascinating to see if equities as an asset class can continue to enjoy quick rotations to account for what remain lingering and glaring problem stocks and sectors. 

Specially, a name like Boeing (BA), the cruise lines and airlines, casinos, banks and insurers, are all below declining 200-day simple moving averages, with their exuberant rallies into early-June seemingly a distant memory at this point. 

On the Carnival (CCL) daily chart, updated below, for example, the prominent cruise line looks at risk for another wipeout lower into August. After months of tedious back-and-forth, the overall bearish trend remains intact.

Recall that exuberant rallies based on hope and bull blindness to a major bottom are not the exception during bearish trends--They are, indeed, the rule. Thus, the early-June head-fake is simply part of the script. One has to wonder how the broad market will react if and when the cruise lines and other problem spots suffer another meaningful leg lower, since this time around the lonely-at-the-top leaders are roughly 100% higher in some cases from where they were at the March lows. 

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