Netflix (NFLX) is not a stock that usually meanders sideways, but that is exactly what it has done for the past 5+ months.  You can see the sideways track that NFLX has taken recently in the chart below pulled from our Security Analysis page that’s available to Bespoke Institutional members.

Over the last 100 trading days, the high/low closing spread for Netflix (NFLX) has been 19.5%.  Below is a chart showing the rolling 100 trading day high/low spread for NFLX since it IPOd, and as you can see, the current spread is as tight as the stock has seen throughout its history.  It could certainly get tighter, but we would expect this stock to break either higher or lower in a big way sometime soon given the long consolidation phase that it’s currently in.

One week ago, small-caps—like the Micro-Cap ETF (IWC), Russell 2000 (IWM), and Core S&P Small Cap (IJR)—and the Nasdaq (QQQ) had all been unable to move out of oversold territory like the other major index ETFs. That has changed this week as all of the US index ETFs tracked in our Trend Analyzer tool are currently neutral. While they have moved out of oversold, small-caps are still lagging in the sense that they remain the furthest below the 50-DMA. Other indices either sit just below or have broken above in the past week.  The Nasdaq has seen the most notable move towards the 50-day, surging 3.27% out of oversold territory. A weak earnings report from Broadcom (AVGO) last night has put pressure on the semis, and as a result, the broader technology sector and a tech-heavy Nasdaq. This is likely to eat into some of these gains today so it may take a bit longer until QQQ takes out the 50-day.

Over the past week, like the major index ETFs, the different style ETFs are almost entirely sitting at neutral. Although, there are some outliers like the S&P Low Volatility (SPLV) which is working its way out of extreme overbought levels (presumably as a flight to safety following May declines). One trend this week but also generally in 2019 to take note of is the outperformance of growth stocks versus value.  Broadly speaking, the growth-focused ETFs like the Growth ETF (VUG) have been outperforming their value-focused peers by around 1% in the past week. This is the case across most of the indices and market caps, though, S&P Small and Mid Cap have seen slight outperformance of value. This is more evident in small caps.  Additionally, earnings has been outpacing dividend-focused ETFs.  Start a two-week free trial to Bespoke Institutional to access our interactive economic indicators monitor and much more.

What a day and a year it has been for Disney (DIS).  The company’s stock is up over 4% today, which is the type of one day gain it has only seen three other times in the last four years.  While the stock is not quite at an all-time high on an intraday basis, if the current levels hold into the close, it will be the highest closing price for the stock on record.

Shares of Disney are currently up over 29% YTD, putting it on pace for its best YTD performance (through 6/13) since 2000.  The table below lists all years in which Disney shares were up 25% or more through this date in the year going back to 1980. For the nine prior years shown, we also show how DIS performed from 6/13 through year-end as well as how the stock performed for the entire year.  As the results indicate, there is no clear pattern for the stock following strong starts for the year in the first half.  In the nine prior years shown, the stock was up 10%+ four times, down 10%+ four times, and basically flat once!

One decade out of the last four that was exceptionally strong for DIS was the 1980s.  Of the nine prior years highlighted in the above table, five of them were in the 1980s.  All those strong years add up.  In that decade alone, the stock was up 918%, even after a decline of 17% in the final 12 weeks of 1989.  Without that last sell-off to close out the decade, DIS would have been up over 1,120%.  Start a two-week free trial to Bespoke Institutional to access all of our research and best stock ideas.

With equities pulling back in May, investor sentiment has held a bearish bias over the past few weeks.  Last week’s rally has reversed this build-up of bearish sentiment to a small degree as the percentage of investors reporting as bulls in this week’s AAII survey grew to 26.84% from 22.53% last week.  While this is an improvement, investors have been hesitant to rush back as bullish sentiment remains low relative to history.  This week’s reading is still over one standard deviation below the historical average of 38.19%. This is a bit of a contrast to the Investors Intelligence survey of newsletter writers, which saw bulls come surging back with the largest increase in the number of respondents reporting as bullish since the first weeks of 2019.

Bearish sentiment, on the other hand, saw a sharper move, falling to 34.2% versus 42.58% last week.  That is the largest decline in bearish sentiment since February 7th of this year when it had fallen just under 9% from 31.76% to 22.78%.  Similar to bulls, while this is an improvement, bearish sentiment remains elevated above its historical average. Additionally, the bull-bear spread has favored bears for five weeks in a row now. The last time the spread had a streak like this (also five weeks long) was in May of 2016.

More than anything, investors appear to be hesitant on the current market as neutral sentiment is the predominant sentiment this week.  Neutral sentiment is up ~4% this week to 38.96%. While higher than average and elevated, as it has been most of this year, this is not at any sort of extreme reading. Start a two-week free trial to Bespoke Institutional to access our interactive economic indicators monitor and much more.