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Is This Rally Showing Signs of Aging?

Whither stocks? We are overbought, but that doesn't mean the markets will drop. Traders have been worried that the market rally is showing signs of aging; for example, the percentage of stocks below their 10-day moving average is faltering.

Lowry, a respected technical analysis service, in a note to clients this morning, looked at the evidence and concluded: "the rally from the March low has yet to fully run its course."

They base this on several observations, but particularly on the improving volume in the last several weeks.

Online travel stocks have been flying, but...it doesn't necessarily mean travel is improving.

Priceline up 17 percent to its highest level since 2000 (!). Priceline reported earnings and revenues above expectations, and also guided higher.

Priceline is primarily a seller of discounted hotel rooms, and here their most important metric (hotel room nights) showed a notable increase of 44 percent.

One other factor helping: better international sales, about 56 percent of bookings.

But we are not seeing huge increases in bookings at hotels. True, Expedia also beat earnings by a wide margin, and they too saw room night growth of 26 percent (they are at a 52-week high as well). But they are also frequently selling rooms at a discount.

The bottom line: these companies (and others like Orbitz ) are benefiting from an increase in online travel shopping, which is reflecting the value tint of the American consumer. Business travel remains depressed.

Program Alert: Priceline CEO Jeff Boyd on The Callat 11:30 PM ET this morning.

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Questions? Comments? tradertalk@cnbc.com


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  • A CNBC reporter since 1990, Bob Pisani covers Wall Street from the floor of the New York Stock Exchange.

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