new car thursday, page-5

something is not right. The DJIA was up 82 points but I feel a cold chill. It had been up 137 points but faded into the close to remain under the 50 day ema. The SPX was much weaker with a 2 point (0.16%) gain and the NASDAQ looked a bit sickly losing 22 points (0.77%) and Apple was smashed.

A closer inspection of the DJIA stocks shows that the rise was mostly on only 2 of the 30 stocks. BAC was up 5.66% and TRV was up 4.92%. From what I can make out Citigroup (not a DJIA component) rose sharply on the news of massive job and cost cuts and BAC simply went along for the ride so perhaps the BAC rise is all hot air but it did make BAC see a new 52 week high.

The divergence between the nasdaq and the DJIA was a little disturbing so I took the time to whizz through the one year charts of the 30 DJIA stocks. I see 5 stocks are at or very close to 52 week highs (BAC, HD, PFE, TRV and PG) and 6 stocks are at or very close to 52 week lows (DD, CAT, AA, HPQ, INTC, and MCD)

http://en.wikipedia.org/wiki/Hindenburg_Omen

Now I know the hindeberg omen considers ALL stocks on the NYSE and not just the DJIA but the Hindengerg requires only 2.8% of stocks to be making 52 week highs and 2.8% to be making 52 week lows. The DJIA has 16.7% near the highs and 20% near the lows. that is not a good look.

Add to that stocks like IBM. The last year looks like it has been all about a double top after several years of relentless rise. Whilst it is not at the 52 week low it is closer to the bottom then the top and one gets a sense that the chart could give way at any time. and on the other side of the coin there are DJIA components like MRK which are closer to the top but it looks very much like it is at the top of a right shoulder of a head a shoulders.

In conclusion it seems to me that the US market is running
out of breadth.