Trading Places with Tom Bowley

Biotechs Explode, Send Healthcare To Leadership Role; Energy Runs Out Of Fuel

Market Recap for Wednesday, June 21, 2017

Biotechs ($DJUSBT) are the "semiconductors of healthcare".  When they move, they move!  Healthcare (XLV, +1.27%) was easily the best performing sector on Wednesday as the DJUSBT soared 3.43%.  Unless we see a major reversal between today and tomorrow, we'll have a very significant breakout on the weekly chart.  Here's the visual:

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Biotechs Breakout, Lead Healthcare Stocks Higher

Market Recap for Tuesday, June 20, 2017

Healthcare (XLV, +0.33%) was one of just two sectors - utilities (XLU, +0.06%) was the other - to rise on Tuesday as much of Monday's gains was relinquished.  The good news, however, is that biotechs ($DJUSBT) made a significant breakout on Tuesday and that bodes well for the group over the next couple months.  History won't hurt the group either - check out the Historical Tendencies section below.  Here's a five year weekly chart showing the significance of this move above 1800:

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Technology Stocks Rebound Sharply, Lift S&P 500 To Next Record

Market Recap for Monday, June 19, 2017

Technology (XLK, +1.48%), healthcare (XLV, +1.04%) and financials (XLF, +1.03%) led a broad-based rally on Monday that included seven of the nine sectors.  Only energy (XLE, -0.63%) and the defensive utilities (XLU, -0.33%) failed to participate in the rally.  While it was nice to see computer hardware ($DJUSCR) bounce off its rising 20 week EMA, I was much more closely watching the biotechs ($DJUSBT) for a significant breakout near 1800.  Check these two charts out:

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Amazon Buys Whole Market.....Literally

Special Announcement

At 4:30pm EST this afternoon, just after the U.S. stock market closes, I'll be joining John Hopkins, President of EarningsBeats.com, for a special 90 minute presentation.  John will discuss the benefits of trading companies that have reported strong quarterly revenues and earnings (ahead of Wall Street estimates) and I'll demonstrate how to create ChartLists of these companies and how you can set up specific scans of this ChartList using the tools here at StockCharts.com.  It'll be a powerful presentation, one that could significantly improve your chances of trading success.  To join us, simply CLICK HERE for more information on how you can reserve your spot to this afternoon's event!

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Industrials Lead, Challenge December Relative Highs

Market Recap for Thursday, June 15, 2017

There's been marked improvement in the relative strength of industrials (XLI, +0.60%) in recent weeks and that was on full display Thursday.  Despite all of our major indices finishing lower, the XLI managed to end the session in positive territory and ahead of the remaining eight sectors.  The only other sector to finish higher was the defensive utilities sector (XLU, +0.57%).  In addition, the XLI passed healthcare (XLV, -0.10%) in terms of SCTR rank on Thursday after surpassing technology (XLK, -0.45%) earlier this week.  The XLI's SCTR score of 86.5 now trails only the XLU, which currently has a 92.3 score.

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Defensive Sectors Lead As Fed Hikes And Maintains Forecast

Market Recap for Wednesday, June 14, 2017

The FOMC concluded its two day meeting on Wednesday afternoon and, for the most part, followed its prior script.  They stuck to their previous plan to raise interest rates for a third time in six months and maintain their forecast for another rate hike in 2017.  They also indicated their intentions for three more rate hikes in 2018 and discussed their plan to reduce their bloated balance sheet.  The market response?  Mostly boring to be quite honest.  The Dow Jones and S&P 500 traded in a 0.5% range in the final two hours, although the NASDAQ resumed its recent volatile action and sold off roughly 1% in the hour following the Fed's announcement before turning higher and cutting those losses in half by the close.  Here's the NASDAQ's intraday volatility visualized:

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Home Construction Breaks Out Ahead Of FOMC Announcement

Market Recap for Tuesday, June 13, 2017

Technology (XLK, +0.72%) rebounded after two days of brutal selling.  It occurred after a hammer printed off a 50 day SMA test on Monday.   That was a relief for many market participants as the XLK has been the undisputed sector leader for many, many months.  Throughout technology's selling, however, other sectors have stepped up to lead and keep the overall market conditions quite bullish.  Yesterday, basic materials (XLB, +1.25%) took a turn and its current technical outlook couldn't be much brighter.  Take a look:

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NASDAQ And Technology Slump Continues; Apple Downgraded

Market Recap for Monday, June 12, 2017

U.S. indices fell in unison on Monday and the tech-laden NASDAQ led the action, but after Friday's bloodbath, it certainly could have been worse.  Based on overall action Friday and Monday, it appears to be a healthy rotation from the aggressive technology sector (XLK, -0.59%) to other aggressive sectors like industrials (XLI, +0.37%) and financials (XLF, +0.21%).  The oversold energy sector (XLE, +0.71%) has performed very well the past two sessions and on extremely heavy volume so it's possible that the energy group also benefits from short- to intermediate-term weakness in technology.

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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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