Trading Places with Tom Bowley

Rotation Turns Defensive As S&P 500 Consolidation Continues

Market Recap for Thursday, May 11, 2017

Consumer staples (XLP, +0.15%) and utilities (XLU, +0.14%) were beneficiaries of money rotating more defensively on Thursday.  While the end result at the close wasn't bad overall (the Dow Jones and S&P 500 lost 0.11% and 0.22%, respectively), the losses earlier in the session were as significant as any we've had in nearly a month.  The Volatility Index ($VIX) was up approximately 10% at the S&P 500's intraday low as you can see below:

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A Deep Look Into Healthcare And Its Bullish Pattern

Market Recap for Wednesday, May 10, 2017

The energy sector (XLE, +1.32%) was very strong on Wednesday as crude oil ($WTIC) bounced more than 3%.  With crude oil up nicely again this morning, we should see more strength and leadership from the XLE today.  Technology (XLK, +0.38%) and financials (XLF, +0.34%).  Leading technology was the semiconductor space, which powered forward to yet another breakout.  While nothing seems to slow this industry group, just be aware of a nasty negative divergence present on its weekly chart.  Check it out:

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Hotels And Gambling Stocks Lead Strong Discretionary Sector

Market Recap for Tuesday, May 9, 2017

Consumer discretionary stocks (XLY, +0.58%) were easily the leading group on Tuesday as hotels ($DJUSLG) and gambling ($DJUSCA) stocks were outperformers.  Automobiles ($DJUSAU), recreational products ($DJUSRP) and home construction ($DJUSHB) also performed quite well.  The latter group held recent price support and yesterday cleared both its 20 and 50 day moving averages.  I'd expect more leadership from home construction.  Here's the chart:

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Truckers: Short-Term Sell Signal Setting Up Long-Term Buy

Market Recap for Monday, May 8, 2017

The small cap Russell 2000 lagged on Monday with the other major indices tacking on minor gains.  Energy (XLE, +0.71%) was the leader with coal ($DJUSCL) jumping 3.50%.  The DJUSCL, however, is hitting major trendline resistance after kick-saving at price support.  Take a look at the chart:

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Dow Jones Tops 21000 For Second Time

Market Recap for Friday, May 5, 2017

The headline news from Friday is that the Dow Jones was able to clear psychological overhead resistance at 21000 for only the second time in history (March 1st was the other) and that the S&P 500 managed to clear its all-time high close at 2396.  The S&P 500 technical picture is addressed below in the Current Outlook section so let's focus here on the Dow Jones.  Despite the close above 21000, the Dow Jones still fell short of its all-time high close of 21115 from March 1st.  Check it out:

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Bifurcated Action Stymies Global Markets - For At Least One Day

Market Recap for Thursday, May 4, 2017

Happy Cinco De Mayo!

Cuatro De Mayo turned out to be a very flat day, with bifurcated action throughout the market.  Even global markets were bifurcated.  I counted 13 international ETFs higher yesterday with 10 lower.  Markets everywhere are consolidating after mostly higher moves.  The rotation and continuation patterns that are evolving remain quite bullish in my view.  Here's an example:

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Banks Lead Rebound In Financials; IBN Breaks Out On Big Volume

Market Recap for Wednesday, May 3, 2017

Financials (XLF, +0.80%) were easily the best performing sector on Wednesday as banks ($DJUSBK) led the rebound in interest-sensitive stocks.  After gapping lower yesterday, the 10 year treasury yield ($TNX) climbed throughout the session and finished back above the 2.30% level.  This came on the heels of the FOMC's latest announcement where Fed Chair Janet Yellen suggested the slowdown in GDP was "transitory" and traders immediately placed bets on another rate hike in June.

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Apple iPhone Sales Disappoint, Could Lead To Short-Term Relative Weakness On NASDAQ

Market Recap for Tuesday, May 2, 2017

Traders weren't overly impressed with Apple's (AAPL) quarterly report last night and NASDAQ futures are suffering this morning.  However, the NASDAQ 100 ($NDX) has been significantly outperforming the benchmark S&P 500  for months and a bit of relative weakness would not be a bad thing at all.  The following chart shows how the NDX has performed vs. the SPX over the past 10 months:

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NASDAQ, Russell 2000 Flexing Their Relative Muscles

Market Recap for Monday, May 1, 2017

The NASDAQ and Russell 2000 outperformed in a big, big way on Monday and that's always a very positive sign for equities.  In addition, strength came from technology (XLK, +0.75%) and financials (XLF, +0.64%), two of the aggressive sectors.  Once again, we saw consumer discretionary (XLY, +0.13%) clearly outperform its staples counterparts (XLP, -0.38%), another positive.  Finally, the XLP and utilities (XLU, -0.60%) were lagging, reflecting weakness from defensive components.  All in all, it was a very solid performance for the U.S. stock market on Monday.

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Commercial Vehicles Break Out To Lead Industrials

Market Recap for Friday, April 28, 2017

Equities sold off throughout the day on Friday, but no significant levels of support were lost.  Starbucks (SBUX) jolted the market a bit, gapping down to test its rising 20 day EMA, but that support level held and while the internet group ($DJUSNS) may have found a short-term top with a reversing shooting star candle, the longer-term technicals are quite strong.  Here's a quick glimpse at both the DJUSNS and SBUX after Friday's action:

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