Twas the day after Thanksgiving break and all through the house,
Everyone was buying stocks......everyone.
A little stunted poetry by yours truly. The stock market did one of its patented gap up go nowhere after that moves today as the Dow traded at about up 300 points until the final hour. What I found fascinating was that breadth indicators were completely and massively lopsided during the morning hours. Everything (almost) was up and all (almost) breadth indicators were pinned at extremes.
A hat tip to RAI Bob Shohet for posting this stuff to the pro chat room we frequent. He pointed out that the Arms index (TRIN, for you indicator neanderthals) was at a level that was likely a multi-year if not all-time low. What that meant was the all the king's issues and all the king's volume were in the hands of the bulls. Green everywhere and a lot of it, at least on a relative basis.
The ratio of up to down volume was something like 150 to one in the early going. That's a stampede in my book.
But as I was writing my column for Barron's Online I noticed a lot of fading going on. Stocks that were up 5% were up 3%. Stocks that were up 2% were flat. I took that as a lot of people fading the rally.
As they say, the market does not like group think (actually, I just made that up but it is not a unique insight). When everybody is in a buying mood, you know it is something up with which the market will not put.(C'mon, where are the Winston Churchill fans?)