It's been almost one year since the market began its relentless rally. What strikes me most in recent weeks is how many dislocations there have been in individual stocks while the market indices appear zombie-like as they sleepwalk higher -- seemingly almost every trading day.
This isn't to say that the indices should collapse or soar, but two-sided markets are better than one-way trips in my opinion. Yet in the last few weeks, the gaps up and down in individual stocks have been wild. When a stock like Merck (MRK) - Get Report , a big-cap Dow name, goes from near a 52-week high to a 52-week low in a matter of weeks in a hot market, that's something. Merck gapped under its recent lows, then gapped again as if it were a speculative, small-cap biotech stock:
Then there's a what used to be beloved Advanced Micro Devices (AMD) - Get Report , which has gone from friend to pariah. Not only is it down more than 20% in a week, it didn't even take a breather at $12, where it had support for the past several months:
How does that happen?
There have been a fair number of gaps up as well. We've all seen Amazon (AMZN) - Get Report and Alphabet (GOOGL) - Get Report , but my point here is that there's a lot of volatility in individual stocks, but none in the indices. Which baffles me.
As for Tuesday's market, breadth improved to the best we've seen in a month. Of course, that's because the Russell 2000 rallied. But that lift in breadth still wasn't quite enough to lift the McClellan Summation Index, which is definitely heading down:
It will take a net differential of +1,300 advancers minus decliners on the New York Stock Exchange to turn the McClellan Summation Index from down to flat -- which I suppose is better than things were a few days ago, when it required +2,300. But since this chart tells us what the majority of stocks are doing, you can see that in the past few weeks, they haven't kept pace with the indices.
Then there's the issue with sentiment. The latest Investors Intelligence weekly survey has bulls at 63.5% -- the highest level in decades. The bears even slipped under 15% this week to 14.4%. That makes the ratio of bulls to bears well over four, as you can see on this chart:
In the past, this has meant a market correction. But in this market, maybe it just means we're seeing more individual stocks with big gaps.
In sum, I have thought we'd get another round of volatility after that initial surge a week ago, but thus far that's been a wrong view. I remain hopeful we will still have some more volatility in early November.
(This column originally appeared at 6 a.m. ET on Real Money, our premium site for active traders. Click here to get great columns like this from Helene Meisler, Jim Cramer and other writers even earlier in the trading day.)
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At the time of publication, Meisler had no positions in the stocks mentioned.