Trading Places with Tom Bowley

Russell 2000 Soars, On Cusp Of Breakout

Market Recap for Thursday, June 8, 2017

Small caps were the clear and undeniable leader on Thursday as the Russell 2000 gained 1.36% while the NASDAQ was the second best performing index at +0.39%.  I posted yesterday in this blog that the Russell 2000 needed to clear 1420 and on Thursday it reached a high of 1419.32 before turning back down in afternoon trading.  Still, the gains were quite impressive and it enabled the Russell 2000's relative performance vs. the benchmark S&P 500 index ($RUT:$SPX) to jump significantly as well.  Relative strength in small caps tends to suggest the sustainability of a bull market advance and it's been one of the lacking ingredients for me to feel aggressively bullish about the stock market.  Check out this 10 year relative chart:

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Retail REITs And Banks Lift Financials But Energy Weighs With Plunging Crude

Market Recap for Wednesday, June 7, 2017

Crude oil ($WTIC) took a dive on Wednesday as inventories rose unexpectedly, causing a bit of panic among traders.  Inventory supplies had fallen for eight straight weeks and traders were anticipating another drop of 3.5 million barrels.  Instead, at 10:30am EST, the petroleum report hit Wall Street and it showed that inventories had actually risen 3.3 million barrels, a miss of 6.8 million barrels.  It was too much for this beaten down commodity to handle and prices quickly plunged.  Look at the intraday chart from Wednesday:

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Energy Leads And Hadn't Done This Since November

Market Recap for Tuesday, June 6, 2017

Energy (XLE, +1.18) was easily the best performing sector on Tuesday as materials (XLB, +0.06%) was the only other sector to finish in positive territory - barely.  Over the last five trading days, the XLE has printed a hollow candle (closing price finishes above opening price) four times.  That has not happened since November and it did trigger a significant uptrend for the next 6-7 weeks.  We'll see if we get a repeat.  Energy got a lift from coal ($DJUSCL) and oil exploration and production stocks ($DJUSOS) as these two industry groups rose 2.12% and 1.46%, respectively.  Both were very oversold and needed a bounce, but the DJUSOS, in particular, bounced off a key price support zone on its one year chart as you can see below:

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Equities Down But Losses Mitigated By Two Unlikely Sectors

Market Recap for Monday, June 5, 2017

It wasn't a horrible day on Wall Street.  After all, we've been in a strong advance since mid-May with the S&P 500 rising nearly 4% during that span.  So a little bit of profit taking shouldn't be of too much concern.  It was a typical Monday where we saw controlled selling in a complacent and bullish market.  Mondays have risen just 47% of the time on the S&P 500 since 1950.  It's the only day of the week where we've seen more losses than gains.  I'm never surprised by some Monday selling.  Personally, I believe it's psychological as much as anything.  Who wants to go to work on Monday?  Wednesdays, Thursdays and Fridays, on the other hand, have proven over time to be the best calendar days of the week as we approach the weekend.

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Software And Semiconductors Lead Another Technology-Driven Rally

Market Recap for Friday, June 2, 2017

Technology (XLK, +0.92%) led U.S. equities higher on Friday and that's been the case for several months now.  The XLK has been the best performing sector with a current SCTR (StockCharts Technical Rank) reading of 92 further validating that.  Two familiar industry groups - software ($DJUSSW) and semiconductors ($DJUSSC) - led the charge higher with gains of 1.44% and 1.28%, respectively.  While a sizable pullback is long overdue, it's been a year since the DJUSSC closed a week beneath its rapidly rising 20 week EMA.  Check this out:

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Financials Rally To Lead U.S. Indices To New Records

Market Recap for Thursday, June 1, 2017

U.S. equities had a very strong day on Thursday, with the small cap Russell 2000 leading the charge with a solid 1.89% gain.  The move was also widely participated in, with all nine sectors finishing higher.  Financials (XLF, +1.25%), a clear relative laggard since early March, regained its relative strength yesterday as it was led higher by groups that tend to perform well in a rising interest rate environment - namely, banks ($DJUSBK), life insurance ($DJUSIL), investment services ($DJUSSB), etc.

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Autos Rise, Break Downtrend Line; Tesla Benefits

Market Recap for Wednesday, May 31, 2017

Utilities (XLU, +0.50%) and healthcare (XLV, +0.40%) led a defensive-oriented market on Wednesday with the latter nearing a significant bullish ascending triangle breakout.  Materials (XLB, +0.30%) and consumer staples (XLP, +0.28%) also performed well.  The aggressive sectors were mixed with consumer discretionary (XLY, +0.26%) and industrials (XLI, +0.19%) finishing in positive territory, while financials (XLF, -0.85%) was easily the worst performing sector.

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Strength In Internet, Software And Semiconductors Leading Technology Group

Market Recap for Tuesday, May 30, 2017

Technology (XLK, +0.43%) remains the heart of this current bull market.  The XLK was the sector leader on Tuesday, with utilities (XLU, +0.32%) a close second.  Over the past week, utilities and consumer discretionary (XLY) hold a slight edge over technology.  However, technology is the best performing sector over the past month, three month, six month and year periods.  They simply have not relinquished the top spot among sectors as traders continue to find reasons to buy component stocks.  Rotation has been key.  As an example, the Dow Jones U.S. Mobile Telecommunications Index ($DJUSWC) is higher by an astounding 44.85% over the past year, but the DJUSWC has been a laggard the past month (-1.37%) as telecommunications stocks have taken a back seat to all other technology industry groups.  While the one month leader has been electronic office equipment, this strength is mostly due to a bounce in Pitney Bowes (PBI) as the index tracks PBI very closely.  The second best industry group has been semiconductors ($DJUSSC) as you can see below:

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Dow Jones In Record High Territory Amid Signs Of Slowing Momentum

Market Recap for Friday, May 26, 2017

Friday's action was slightly bullish overall, but there was little difference between the best performing sectors and the worst performing sectors.  Consumer stocks performed well with consumer staples (XLP, +0.37%) and consumer discretionary (XLY, +0.30%) leading all sectors.  On the flip side, slight weakness was found in healthcare (XLV, -0.18%) as pharmas ($DJUSPR) and biotechs ($DJUSBT) were weak.

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