GMCR recently signed a partnership with Coca Cola. The stock absolutely rocked higher. It pulled back, I posted the chart with the green arrow, showing the climb out of the valley. Well, here we are a few days later.
The MACD failed to give us a positive cross. That is usually a giant warning. Stops have to be very close as this could break down quickly. If the Nasdaq continues it's underperformance, I would expect these high multiple growth stocks to pull back.
This is the chart I use to demonstrate the Nasdaq underperformance.
When this chart is going up, the $SPX is outperforming the high growth stocks in the Nasdaq 100.
That is a very big caution for me that a trend is changing. A rotation into value stocks like JNJ and WMT seems to be occuring.
Greg Schnell, CMT