GO
Loading...

Does S&P Streak Point to 'Dangerous Overshoot?'


The S&P 500 hasn’t declined more than 1 percent during a single trading day since Feb. 23, a 30-day stretch that is the longest of the bull market that began last March, according to the Bespoke Investment Group, one of the top trend-finding firms at work on Wall Street today.

“Guys are just chasing the market at this point,” said Tim Seymour, founder of EmergingMoney.com and a hedge fund manager. “Mutual fund managers are lucky if they’ve even caught a third of this rally from last March.”

Seymour, also a ‘Fast Money’ trader, believes that’s why there are always plenty of buyers to swoop in during the day on any pullback. While he’s still constructive on the market long-term, he warns that this streak speaks to a “dangerous overshoot at some point.”

One barometer of future movements for the overall market started to breakdown this week. The iShares Dow Jones Transport ETF is a widely followed leading indicator of the overall market because it encompasses companies such as FedEx and railroad CSX, which are the first to see changes in economic activity. The transports have separated from the market this week, down almost 1 percent as the Dow Jones Industrial Averagecontinues to creep higher.

The 30-day market streak “says a lot about the strength of the bull market from a longer-term perspective,” wrote the Bespoke analysts in a report. But “no one should be caught off guard by a few days worth of losses for the markets at this point.”

One interesting factoid about this nearly month long stretch: the S&P 500 is only up 7.4 percent over that period. It certainly has turned into a slow moving “Blob” bull market.

The tagline for the 1958 movie classic ‘The Blob’ was “Beware of the Blob, it creeps, and leaps, and glides and slides across the floor,” according to IMDB.com.

With reporting by Jennifer Dwork.

For the best market insight, catch 'Fast Money' each night at 5pm ET on CNBC. To play Fast Money’s bracket challenge, go to fastmadness.cnbc.com.

______________________________________________________
Got something to say? Send us an e-mail at fastmoney-web@cnbc.com and your comment might be posted on the Rapid Recap! If you'd prefer to make a comment but not have it published on our website send your message to fastmoney@cnbc.com.

Trader disclosure: On March 26, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Seymour Owns (AAPL), (BAC), (BX); Najarian Owns (BAC) Call Spread; Najarian Owns (C) Calls; Najarian Owns (TCK); Najarian Owns (YHOO) Calls; Najarian Owns (LMT) Calls; Terranova Owns (IOC) Puts, Strikes; Terranova Is Short (GS), (CAL), (UAUA); Grasso Owns (AAPL), (ABK), (ASTM), (BA), (BAC), (BGP), (C), (COST), (CSCO), (PFE), (PRST), (WMT), (JPM), (NEM); Stutland Is Short (GLD); Stutland Equities Is A S&P 500 And VIX Options Market Maker; Stutland Equities Is Short VIX Near Term Volatility, Is Long VIX Long Term Volatility; Cortes Is Short Euro vs. U.S. Dollar

For Anthony Scaramucci
Skybridge And Scaramucci Own (AAPL)
Skybridge And Scaramucci Own (C)
Skybridge And Scaramucci Own (GOOG)
Skybridge And Scaramucci Own (GS)
Skybridge And Scaramucci Own (MCD)
Skybridge And Scaramucci Own (MSFT)
Skybridge And Scaramucci Own U.S. Dollar
Skybridge And Scaramucci Own (MON)

For Tim Seymour

Seygem Asset Management Is Short (PBR)

For JoeTerranova
Terranova Works For (VRTS)
Terranova Is Chief Market Strategist Of Virtus Investment Partners, Ltd.
Virtus Investment Partners Owns More Than 1% Of (EXR)
Virtus Investment Partners Owns More Than 1% Of (GOK)
Virtus Investment Partners Owns More Than 1% Of (IGE)
Virtus Investment Partners Owns More Than 1% Of (XLY)
Virtus Investment Partners Owns More Than 1% Of (DBV)
Virtus Investment Partners Owns More Than 1% Of (XLP)
Virtus Investment Partners Owns More Than 1% Of (XLB)
Virtus Investment Partners Owns More Than 1% Of (XLV)
Virtus Investment Partners Owns More Than 1% Of (XLI)

For Brian Kelly
Kanundrum Capital Owns (S)
Kanundrum Capital Owns U.S. Dollar
Kanundrum Capital Owns (FNM)
Kanundrum Capital Owns (FRE)
Kanundrum Capital Is Short Euro
Kanundrum Capital Is Short Yen
Kanundrum Capital Is Short Swiss Franc
Kanundrum Capital Is Short Copper
Kanundrum Capital Is Short Treasuries
Kanundrum Capital Is Short (GS)
Kanundrum Capital Is Short (FCX)
Kanundrum Capital Is Short (AA)
Kanundrum Capital Is Short (ACH)
Kanundrum Capital Is Short (EWH)
Kanundrum Capital Is Short (FXI)
Kanundrum Capital Is Short (EWY)