09Dec10:02 amEST

Whole Market is Full of Rats

Another sleepy, aloof open seems to generally favor bulls in an ongoing levitation for the major indices above even their 20-day simple moving averages, an otherwise near-term reference point which has remain untested on the Dow, S&P, small caps, and Nasdaq since just after Election Day. One month of trading in the market is a long time to go drifting up and up above the 20-day, especially for a major index, all the while bullish sentiment hits historically high levels (just look at the Put/Call ratio, for example). 

Of course, most market players and pundits are aware of this circumstance by now and are either ignoring it, explaining it away via a "new paradigm" argument, or acknowledging it but not allowing it to be the controlling analytical factor unless and until we see actual evidence of a reversal (our preferred posture). 

In the meantime, have a gander at Chipotle, completely ignoring a repulsive story about rats in one of its New York locations

A few points about this: First, it speaks to the mindset of the current market and how complacent things truly are. Recall prior market cycles (Taco Bell about fifteen or twenty year ago, with a similar NYC rat headlines) where a restaurant stock would get short-term decimated for such a horrifying headlines. Instead, this market celebrates and scoffs at such headlines. 

But beyond that, CMG's stock trying to break out higher, seen on its daily chart from a long sideways base in an overall uptrend, below, may very well be the market looking forward to a long overdue stimulus bill giving Americans some extra cash to buy...burritos. Hey, after all these months of the pandemic, I am sure plenty of people are tired of grocery shopping and cooking especially as money gets tight. 

Stock Market Recap 12/08/20 ... Do You Have What it Takes to...


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