If we were only watching:

If we were only watching the small caps, the mid caps, the NYSE, the Transports and the many areas not thrilling like retail, like restaurants, like housing…we would not think too much of the recent rally. But since everyone concentrates on the Dow, S&P, Nasdaq and Ndx, everyone is thrilled.

We just want to tell you this is still more than a split tape as by our count, even with the recent rally, only out 30-35% of stocks are in good shape, only a handful of sectors are in good shape and this remains the most big cap vs small cap market we have seen in ages.

On October 1, we thought a low was being put in.  On October 2, we thought a good low was being put in. We are now at the point where bullishness has picked up markedly, new high vs new lows is pathetic for the move the market just had and as we said, there are plenty of things still not thrilling. We are also watching closely how the financials got jacked up on “fed” day and have given it all back since. It will not take much for us to start talking that Friday’s action marked at least a short term high. Time will tell.

We are not taking away from what is working. It has just been decidely mega-cap…led by the Goog, Amzn and the like. Narrow market advances can only last so long.