Numerous times over the past few months I've mentioned the lack of participation in the market's new highs, most recently in Where Are The Guests At This Party?
Larry McMillan, whose bible of option trading ‘Options as a Strategic Investment' is the first book anyone who wants to become seriously proficient in options buys, offers the same conclusion in a 5/21/2015 MarketWatch.com article, saying:
“The broad stock market, as measured by the Standard & Poor’s 500 Index, eased its way to all-time highs. However, calling this a breakout would require either a) a vivid imagination, or b) redefining the work “breakout.”
Rather, the market has sort of oozed higher, so I’m calling this an “ooze-out.”
Even the current crowd favorite is struggling. Apple Inc (AAPL) is rated Overweight by Piper Jaffray, with a $162 price target. JP Morgan Chase rates it Overweight with a $145 target. FBR & Co rates it Outperform with a $145 target. And yet, AAPL can't get out of a 3-month trading range:
The growth in the number of funds holding AAPL stock has leveled off:
AAPL's Up/Down Volume Ratio is currently 0.9, suggesting net distribution by institutions, or at least a ‘sit on the sidelines' attitude.
However, it is not unusual that AAPL loses support this time of year. The seasonal track record shows an average 2.8% decline in AAPL over the next 4 weeks:
At some point, a stock gets to the point where the last buyer has bought. With this particular stock, and with the overall market for that matter, make sure it is not you.
Of course, there's much more you need to know and many more stocks you can capitalize upon each and every day. To find out more, please click on the following link: www.markettamer.com/seasonal
Copyright (C) 2015 Stock & Options Training LLC
Unless indicated otherwise, at the time of this writing, the author has no positions in any of the above-mentioned securities.
Gregg Harris is the Chief Technical Strategist at MarketTamer.com.
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