Fewer And Fewer Stocks Are Driving This Rally

Tyler Durden's picture

Intra-market breadth is deteriorating, suggesting fewer and fewer stocks are actually contributing to the current rally in global equities... It seems that all that can break us from this current index-driven 'melt-up' is hot or frigid data that confirms the economy is breaking out of its languid range (though it appears credit is starting to make that decision earlier than stocks).

Internal market breadth narrowing rather than broadening


presented (via BofAML) as a diffusion index (net % of global stocks that rose less net % of global stocks that fell over a rolling 3m period)

and it seems credit is finding it hard to follow equity exuberance...


Charts: BofAML and Bloomberg

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fonzannoon's picture

healthcare, utes and telecom breaking down, financials too. Other than a few MLP's and Tesla I don't see what is keeping us even flat.

fonzannoon's picture

it actually is magic, and it is the death of the financial advisory business (I know you guys are crushed).

Small aspects of different sectors will outperform unextectedly and keep pushing the overall indexes higher while the majority will stagnate and probably lose value. Fundamentals and earnings are out the window so that leaves everyone better off owning an index fund.....that is until everyone gets decapitated at the same time.

Divided States of America's picture

Just look at TSLA and GMCR today....and you know what, those aint even the mother of short squeezes....Dont fuckin short anything anymore. and we will expedite this road leading to the beginning of the end...if ppl keeps shorting, your just prolonging this shitshow to continue...basically the Fed knows shortselling is their best friend now and they intend to 'porsche' this market to the moon at the shorts expense....i think its not a matter of whether we will be shooting to da moon, but how long it will take to get there. So dont short anymore and let this fed fueled lunacy market take its course.

Stoploss's picture

I think we have a 30 year auction today at 2ish.  Should be enough to bang a new high by the close.

smlbizman's picture

did you say utes? whats a ute? fred gywnn r.i.p.

insanelysane's picture

Manufacturers of 0s and 1s to store on big bank computers are up.

NotApplicable's picture

So... breadth down, breasts up.


gjp's picture

Nosebleed valuations like AMZN, CRM, LNKD all moving up today.  I saw a Goldman-generated 25 most undervalued companies in a media piece that included AMZN and CRM, that's what value means nowadays ...

Financials breaking down?  Doesn't look that way to me.  Check out 3x leverage FAS.  Down today, but straight up for months!

Every day Bernanke wakes up, brushes his teeth, and punches the bears in the face.

fonzannoon's picture

when I say breaking down I mean down a half a percent. I don't think anything is actually breaking down.


yogibear's picture

From DOT COM to QE mania. 

gjp's picture

Seriously.  It looks like they are gunning for NASDAQ all-time highs too, probably before the year is out the way things are going.

EmmittFitzhume's picture

They need as many muppets to buy this shit at high prices when they dump it all.

fightthepower's picture

Fuck you Bernanke!

max2205's picture

Print MOAR Ben

buzzsaw99's picture

equities think they are the geniuses these days but really:


q99x2's picture

FED can simulate reality and let the market down to DOW 13,000 so the banks can make a little more money riding the wave. Nothing wrong with that at this point.

LawsofPhysics's picture

Please, monday is non-POMO and at the end of the day, treasuries must be bought and yields must stay below 2.0% on the ten year, period.  Print moar!!!!  Fuck you junkers, just look how "strong" the 30 auction was. 

jubber's picture

...new all time Dow high there, as IBM miracuously adds 200 points

Lost Wages's picture

Resistance is futile. You will be capitulated.

slaughterer's picture

Time for equities to take a break from the rally.  S&P 500 at 1630 is very tenuous and weak.  

pragmatic hobo's picture

today's leading stocks;

GMCR, 38.7% short ratio, up 25% for the day
GRPN, 20.7% short ratio, was up 15% earlier
TSLA, 49.2% short ratio, up 27% for the day
BKS, 31.7% short ratio, was up 30% earlier

Jekyll_n_Hyde_Island's picture

  To make things worse in perspective of the widening gap -- that credit lines are a repository of sub "a" rated securities that will disappear faster than the dodo bird when the market goes through one hiccup.

  I'm scared.  Hold me.

ekm's picture

Nobody seems to believe me.

MS sells to BAC who sells to C who sells to JPM who sells to GS who sells it back to MS.


It can go dow 20k, 30k 1 million, 2 million....until Barack Obama calls the margin because crude oil price will annihilate him.

malikai's picture

It's not that nobody believes you. It's that it's completely standard practice.

And I don't think that Barack Obama is affected in any way by the price of oil.

That's the slaves' problem. The puppet couldn't give two shits about it. If he did, he'd keep the ol' 744 in the garage.

fonzannoon's picture

I think most people believe ekm, and are excited that his low range target is 19k. So much room to run.

The mentality is never different, no matter how many times people get the shit beat out of them

fonzannoon's picture

One of my best friends is a fixed income trader. He does really well. I asked him a few weeks ago if it is extremely difficult to trade these days because the bond market is dead. He said "It's not dead, it's off the hook". I asked him what the hell credit he is trading that is off the hook. He said "Mexican homebuilders". There's your market today.

ekm's picture

Not enough for a 4 trillion DOW "value".

EcoJoker's picture

I tend to agree and hedged my account... will wait for the trouble to pass.

azzhatter's picture

I've gotta say I'm impressed when I look at my account balances. Up everyday makes one a little giddy even if it's fiat. But what really impresses me is my stacks of PMs. I can hold them, admire them and feel secure they will always be there unless an unfortunate maritime incident

frostfan's picture

If the stock market is up, employment is up and everything's happy happy joy joy, then why is major league baseball attendance tanking this year?



Everybodys All American's picture

Miami is going to tarp the entire upperdeck of their 1 year old stadium because of a lack of attendance. Not entirely because the team sold every player last year. Just as the Obama economy is creating more jobs for propagandist's.

slaughterer's picture

TSLA: a VW-type short squeeze.  Wonder what TSLA short is going to kill themselves after today.

fonzannoon's picture

A few of my buddies in Cali say every lib douche out there either owns or is buying a Tesla.

Dr.Vannostrand's picture

SoCal here, will 2nd that for ya, but dont forget the Fisker. Just yesterday was driving next to a douche in a karma; on his phone, just looked the part. Very Matt Zames-ish.

mattdubz86's picture

these correlations don't matter....the market does what it wants to do, credit could spike up to Equity tomorrow and vise versa, no one has a crystal ball, just need conviction , patience, and lots of money and you'll do just fine.

yogibear's picture

From the operation DOT COM in the 90's to QE mania.

All this printing should stimulate oil prices. 


Village Smithy's picture

Bernanke to his secretary: Get Kevin Henry on the phone. I just read something on Zero Hedge about Market Breadth declining. I want to know what that is and what he plans to do about it.

NEOSERF's picture

Honestly, I can't see anything keeping this from Dow 20K...the last 2K will be a sprint once the handcuffs come off Draghi's printing machine.

NEOSERF's picture

When all your alternatives to taking money out of the market yield less than 1%...worrying about declines simply becomes market timing and we know how well everyone does with that.  Therefore, if few pull out of even 7% decline, the rest will see it as a BTFD opportunity.  Short of all out panic about solvency of one of the top 10 banks, no one can afford to be out of this market, and with Ben backstopping the banks, there are no solvency issues anymore.

ivana's picture

truly amazing to withness realtime blowoff. I am monitoring IRX short term interest rate - how pupeteers are lowering it whenever insane rally looses steam - lower and lower, moar and moar - until it gets to 0. And then?

NoWayJose's picture

Fewer and fewer are driving the rally because fewer and fewer are meeting expectations. Reality bites when a company has to face the real economy.