Since the current market rally began on the open of February 12th by my market-timing measure, my list of bellwether stocks are all in the black.
Once again, an example of the value of market timing – when the market moves almost all stocks move with it. And if a stock doesn’t, beware the next down swing.
NFLX leads the rally up 30% so far, FB lags up only 4%.
For the rest of the list, see the chart panel below.
(click on the charts for a larger view)
Took at look at bellwether stocks. With the exception of TWTR and NVDA, all are oversold on last week’s volatile market action to the downside.
With the market also oversold, it’s likely these market-leading stocks are going to jump this week. Good for a scalp at the least, and maybe even an upside swing if the market can manage a few positive days.
The bellwethers are AAPL, AMAZN, NVDA, TSLA, NFLX, GOOGL, BIDU, BABA, TWTR, FB, FSLR, BID, and GS (see the charts below).
(click on the chart for a larger view)
Let’s put it this way:
NVDA UP 14%
NFLX UP 13%
AMZN UP 11.3%
TSLA UP 7.7%
BIDU UP 7.0%
GOOGL UP 6.8%
BABA UP 6.5%
TWTR UP 5.5%
AAPL UP 4.0%
FB UP .9%
The above are year-to-date returns – nine trading days – which is why they are the “bellwether stocks” for this melt-up bull market. They also happen to be the stocks in the NYFANG Index, up 8.4% year to date.
Also I would add FSLR, up 8.2%, as a bellwether for the future of energy.
(click on the chart panel for a larger view)
The long-term breadth indicator I use, which is the McClellan Summation Index, turned down last on 10/17 giving a sell signal for the open of 10/18. Utilizing the New York Stock Exchange advance/decline stock line, one of the broadest measure of market movement there is, it has been, and continues to be, one of the best reads on market direction. Maybe the best.
It defines the market’s longer-term trend.
So what has happened to stocks since the market’s sell signal (or short signal)?
Just some examples (see the chart panel below) – of the 10 stocks on my bellwether stock list, as of today’s close, nine are down, led by TSLA with a 9.1% short profit and BABA with a 5.1% profit. Nine stocks down. In seven trading days.
(click on chart for a larger view)