When we do our daily OptionFlow analysis we always ask for the driving forces of the day. For the last couple of months we clearly identified AAPL, GOOG, BAC, JPM, GS, FCX as the key leading large Cap Stocks. It should come as no surprise to find the BETA MONSTERS Apple & Google as well as some key Banks next to a Gold stock (Freeport) in that Group.
We know we are in an environment with exuberant MOMO, deteriorating BREADTH, deteriorating VOLUME/ Money Flows, so we when can we tell that the Market is ripe for some correction? The answer is, when some of the ALPHA DOGS start to behave badly. Bad action can be break downs and/or Pattern failures or relative weakness.
AAPL: solid upside action, buts sports a neg. MOMO Div since Sep/Oct
GOOG: shows relative weakness in the last 60 days
BAC: shows relative weakness since APRIL !!
JPM: shows relative weakness since OCT. 2009
GS: shows relative weakness since OCT. 2009
FCX: solid upside action, buts sports a neg. MOMO Div since Sep/Oct
The Banks are behaving badly , Google is weakening , so the entire Market hinges on AAPL and FCX. The Moment they fall the entite Market will follow.
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