With today’s thrashing of 3M on earnings the split personality of the market continues. On one hand, the breakout from the summer trading range could not be any clearer. It even satisfied my requirement that it pause at resistance before breaking out, too.
But on the other hand, the way it treats earnings winners and losers is unstable pre-selloff behavior. I invoked the Hindenburg Omen in my column last week saying that it was not too dissimilar. The HO looks for lots of new highs and new lows at the same time. The earnings thing has stocks beating their numbers jumping up huge and stocks missing them getting killed.
Usually, an up market treats winners nice and shrugs off the losers by not doing much to them. Conversely, a down market punishes losers and shrugs off winners. This market is doing both.
With Europe’s woes coming back to the fore tomorrow with a French-German announcement (postponed from Monday) risk is the magic word of the day.
