Below are charts of the most bearish stocks on Twitter over the last week and month.
Below are the stocks with the most bearish intensity (volume and scores) on Twitter for both the past week and past month.
This past week saw the S&P 500 Index breaking out to new all time closing highs. All time intra-day highs are just a few points away just above 1576. However, our core market health indicators continue to deteriorate. These aren’t the type of internals we like to see near market tops. Our indicators are telling us that market participants are getting cautious…which makes us cautious too. Our Twitter sentiment indicator for the S&P 500 Index (SPX) is starting to show some strength but without much enthusiasm. Although daily sentiment is painting higher lows and has a good uptrend line it isn’t acting like it should when price breaks out to new highs. Thursday’s move came with a higher intensity of tweets (volume and scores), but the aggregated score for the day was only +10. The move above 1530 on SPX at the first of March is more characteristic of confirmation of a break to new highs. It came with a print of +21 on the day of the break out signaling
The stocks in the chart above have the highest total Twitter Intensity scores. Below are the Monthly scores.
I’ve been meaning to create a sector rotation chart based on Twitter Sentiment for a while and finally got around to it today. The chart below represents the nine major sectors as represented by the SPDR ETFs. The legend next to the chart gives the ETF used for each sector. If a sector has positive Twitter Sentiment (7 day average) then it is represented on the chart in green. If the sector has negative Twitter Sentiment then it is represented in red. The theory behind a sector rotation chart is that during bull markets or extended rallies, Financials, Consumer Discretionary, Technology, Basic Materials, Industrials, and Energy stocks perform well. Bull markets often start with financials, consumer discretionary, or technology leading. Then as the rally gets established the more cyclical sectors of basic materials and industrials start to participate. Late stage bull markets see energy leading. It doesn’t always work out that way, but in general as markets move from the early bull stage to a final top and then turn
Goldman Sachs (GS) and Apple (AAPL) are both up over 4% going into the close today. Meanwhile, the S&P 500 Index (SPX) is struggling at the flat line. I thought GS and AAPL were market leaders. When they rally strongly the rest of the market is supposed to follow. So where is the broad market rally? When the market doesn’t act like it should it is giving you a warning that something may be amiss. As we’ve stated before there are times when you can see that something has fundamentally shifted in the market. The last time we observed this was in mid October when both International Business Machines (IBM) and Google (GOOG) ran into trouble. That day did some serious damage to the rest of the indexes which had mostly ignored bad news up until that time. That gave sufficient warning that investors saw the bad news from IBM and GOOG as something that would impact the market as a whole, rather than just company specific stories. Today we’re
One of the last positive chart patterns has bitten the dust. Financial stocks as represented by XLF had been a place of strength in this market while the S&P 500 Index (SPX) was making a top. XLF has held up relatively better than SPX until last week. If you take a look at the chart below, you can see that financials are now trading with the same type of pattern as the broad market. When the market doesn’t have any leaders then the most likely price is lower. This is one more sign that an intermediate term top is probably in place and we’re likely to see lower prices over the coming weeks. The market is due for a bounce, but so far it just hasn’t had the strength do do any more than consolidate for a few days before moving lower. Be careful if you’re thinking about going long because oversold markets can stay oversold for a long time…especially during the beginning of a large move lower.
Over the past six weeks emerging market stocks (EEM) and financial stocks (XLF) have shown surprising relative strength against the S&P 500 Index (SPX). Both of these indexes have been able to hold their 50 day moving averages even as SPX has clearly broken below its own. In addition, while SPX has broken several levels of support including its recent uptrend line, both EEM and XLF have held theirs. EEM in particular looks to be consolidating just above a breakout of a down trend line. This should be a very positive sign. EEM and XLF are generally leading sectors. We often see them create positive divergences with SPX at the tail end of major corrections. The problem we have now is that these two sectors are showing strength near the end of a rally (rather than the first of one). When leading sectors lag it tends to cause confusion…and confusion leads to consolidation or a down trend. These two sectors are trying to tell us something about the market. One
Financial stocks (XLF) are once again reaching an important level. After the initial rally out of the 2009 bottom, financial stocks have traded largely in a sideways range. During this time the S&P 500 Index (SPX) continued to grind higher, although in a choppy fashion. XLF is now reaching the highs of the range it has been in for over two years. One of the reasons that this rally hasn’t been believed is that financials have lagged. Strong rallies that garner support from institutions and retail investors alike are often led by financial stocks. Money managers always feel better if the companies they work for are making money. Brokers are more confident if they can move product. Employees of large financial institutions know if deals are getting done and if the bank is making money. Whether it’s underwriting IPOs, backing mergers, engaging in proprietary trading, or selling product to retail investors, people in the financial industry see activity (or lack thereof) and it influences their psyche. So when financial stocks