Trading Places with Tom Bowley

Webinar Reminder 4:30pm EST Today

I just wanted to send out a quick reminder about a webinar that I'll be conducting with EarningsBeats.com President and CEO John Hopkins.  It starts in roughly an hour with the webinar doors opening as the stock market closes.  I will be discussing trading strategies during earnings season and I'll provide a brief analysis of current market conditions.

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Evaluating The Technical Health Of Energy And Healthcare

Market Recap for Monday, March 6, 2017

U.S. equities experienced a little profit taking on Monday, nothing technically damaging, but all our major indices did finish lower.  The only sector to escape damage was energy (XLE, +0.22%), while all the others declined.  On a relative basis, the XLE neared a major support level and now is attempting to change relative directions and perhaps lead the benchmark S&P 500 for a bit.  Below is the XLE:$SPX relative ratio:

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Sticking With Global Theme, China Stocks Look Bullish

Market Recap for Friday, March 3, 2017

We saw bifurcated action on Friday with the Dow Jones, S&P 500 and NASDAQ all posting minor gains while the Russell 2000 fell slightly.  Sector action behaved similarly as about half the sectors climbed fractionally while the rest finished in negative territory.  Healthcare (XLV) continued its torrid winning streak and was one of Friday's best performers.  Here's the latest look at the chart:

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Special Home Construction Review - Stocks To Consider

I'm providing this special Saturday edition of Trading Places as a result of a very significant breakout in the home construction index ($DJUSHB).  One way to participate in this breakout is to buy an ETF that tracks home construction stocks.  One example is the ITB.  The latest disclosure of holdings of the ITB include the following:

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Heavy Construction Ready To Do Some Heavy Lifting

Market Recap for Thursday, March 2, 2017

Thursday was a day of profit taking as all of our major indices retreated with the small cap Russell 2000 taking the biggest hit, falling 1.27%.  Every sector finished lower with the exception of the defensive utilities sector (XLU), which actually gained 0.72%.  Consumer staples (XLP, -0.02%), another defensive sector, was also able to weather the profit taking storm.  Both the XLU and the XLP have completed their cup formations with a potential handle (short-term weakness) to come.  Here's the longer-term weekly look at both sectors:

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Dow Jones Soars 300 Points, Breaks 21000; FTSE Very Bullish

Market Recap for Wednesday, March 1, 2017

U.S. equities surged on Wednesday, with the Dow Jones and S&P 500 gaining 1.46% and 1.37%, respectively.  The small cap Russell 2000 rebounded big time after its Tuesday drubbing, spiking 27 points, or 1.94%, to 1413 - an all-time high close.  It wasn't just a U.S. rally, however, as global markets exploded higher, particularly in Europe where both the London Financial Times ($FTSE) continued its recent breakout after a multi-decade consolidation period.  If the following chart doesn't excite you, I'm not sure what will:

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Overbought Aggressive Sectors Lead Decline In U.S. Equities

Market Recap for Tuesday, February 28, 2017

It was a day of profit taking on Tuesday.  All of our major indices declined, although the selling was certainly contained.  The S&P 500, for instance, dropped just 0.26% and remains near its all-time high.  Weakness in consumer discretionary (XLY, -0.75%), technology (XLK, -0.48%) and industrials (XLI, -0.41%) led to a much steeper drop in the more aggressive NASDAQ (-0.62%) and especially the small cap Russell 2000 (-1.51%).  The XLY, XLK and XLI are all very overbought on their respective weekly charts so a period of weakness would not be too alarming.  The fall in small cap shares is a bit more concerning, however, as yesterday's close of 1386 was slightly below its 20 day EMA, currently at 1388.  Furthermore, the Russell 2000 is the only major U.S. index that currently is reflecting a negative divergence on its weekly chart.  Check it out:

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History Suggests Energy, Financials And Industrials Are Poised To Lead U.S. Stocks

Market Recap for Monday, February 27, 2017

Energy (XLE, +0.86%) led the market advance on Monday and that hasn't happened much over the past few months.  But as I have shown below in the Sector/Industry Watch section, I believe there are several technical signs that we could have witnessed (or be in the process of witnessing) a very significant bottom being set.  The XLE is also the best performing sector ETF during the calendar months of March and April over the past two decades.  Tomorrow marks the beginning of March so we'll soon find out whether historical trends begin to kick in.

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Utilities Taking Advantage Of Tumbling Treasury Yields

Market Recap for Friday, February 24, 2017

The 10 year treasury yield ($TNX) tumbled 7 basis points on Friday and that continued the recent string of solid days for utilities (XLU, +1.52%).   Healthcare (XLV, +0.48%) is also benefiting from the rotation to defensive areas of the market as the XLV has been the best performing sector over the last 30 days with a gain of 8.27%.  Utilities aren't far behind, gaining 6.63% over that span.  The XLV could run into price resistance difficulties, however, as it's nearing its August 2016 closing high of 75.06.  Take a look:

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Lessons To Be Learned From A Consolidating Industry Group (Tires)

Market Recap for Thursday, February 23, 2017

The action on Thursday was not bullish at all.  Yes, the Dow Jones and S&P 500 rose again with the Dow setting another all-time high.  Great action, right?  Wrong.  The more aggressive NASDAQ and Russell 2000 both fell again by .43% and .66%, respectively, and that's unfortunately been the pattern of late.  The stock market moving higher - or attempting to move higher - with leadership coming from defense.

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