Yellow: Probably Nothing?

This is a tricky day with markets coming off new highs and capital looking for a home.

Well hello…

Just a quick note. I’m looking at our flow chart - stocks breaking out and breaking down. We look across the seven directions that stocks can go based on the academic analysis of momentum readings.

Without diving into coefficients, you can do the poor man’s version of this. That’s where you just take stocks up 5% in a week, up on the month, and add elevated Beta.

Then, you do the same with down 5% in a week, down on the month, and elevated Beta. You’ll end up with a score of 24 on the Breakout phase and 22 in the Breakdown phase. However, if you do some analysis on a sector-by-sector case with different coefficients, it comes out at 23 to 22. So, we’re close here, and there are signs that the market would like to take some risk off the table.

The selling pressure is clear in the horrible day for Axon Enterprises (AXOM) and Quanta Services (PWR). On the positive stock side, there’s weakness in various stocks that had been breaking out like Intel (INTC) and Super Microcompute…