Trading Places with Tom Bowley

3 Takeaways From Tuesday's Renewed Selling...And Why I'd Avoid Gold

by Tom Bowley

Market Recap for Tuesday, February 27, 2018 During a day filled with renewed selling, especially in the final 10 minutes, there were 3 key takeways as far as I'm concerned.  First, the short-term uptrend appeared to have been broken at the end of the day as gap, price and 20 hour EMA support were lost on the S&P 500: Next support would be trendline support somewhere near 2730.  Loss of that level would set up another key price support test in the 2690-2700 area.  A move beneath that zone would likely trigger much more fear. Speaking of fear Read More 

Trading Places with Tom Bowley

Software Breaks Out; Semis, Computer Hardware Next In Line

by Tom Bowley

Market Recap for Monday, March 26, 2018 Monday was a very solid day for U.S. equities.  All of our major indices roared to higher levels, led by the 400 point gain on the Dow Jones Industrial Average ($INDU).  Eight of nine sectors advanced, with only the defensive utilities group (XLU, -0.30%) finishing in the red.  Technology (XLK, +1.57%) led the power surge as telecom equipment ($DJUSCT) broke to a new all-time high behind strength from QUALCOMM (QCOM).  QCOM's 5.78% rise put it within reach of a key breakout: Semiconductors ($DJUSSC) and computer Read More 

Trading Places with Tom Bowley

Looking For March Seasonal Strength? Check These Two Out

by Tom Bowley

Market Recap for Friday, February 23, 2018 After a steady diet of afternoon flops recently, our major indices soared into Friday's close, clearing important overhead resistance in the process.  All major indices finished with 1% gains or more, setting the stage for what could be a very solid week ahead.  The NASDAQ gained 1.79% to lead the charge, but there was a solid 1.60% advance on the S&P 500 as well.  All nine sectors participated in Friday's rally, a bullish sign indeed, although utilities (XLU, +2.61%) were atop the leaderboard, benefiting from a 5 basis point Read More 

Trading Places with Tom Bowley

Higher Treasury Yields Crushing Last Year's Darling - Home Construction

by Tom Bowley

Market Recap for Thursday, February 22, 2018 U.S. indices continued to tread water on Thursday, with mixed action among our major indices and sectors.  The Dow Jones posted a triple digit gain (165 points), but the more aggressive NASDAQ and Russell 2000 indices both fell fractionally.  Volatility ($VIX) subsided a bit with the VIX falling roughly 6.5% back to 18.72.  While the VIX has settled down a lot from the 50 level that we witnessed earlier in February, it remains elevated and should be respected.  Another rapid selloff remains possible and we know that during Read More 

Trading Places with Tom Bowley

FOMC Minutes Spook Traders, Equities Tumble In Final Two Hours

by Tom Bowley

Market Recap for Wednesday, February 21, 2018 Well, the U.S. stock market was humming right along..until the FOMC minutes were released at 2pm EST.  Take a look at this intraday chart on the Dow Jones and S&P 500 and I think you'll fairly quickly realize that something happened just after 2pm: I don't believe interest rate fears are spooking traders.  I think it's potential inflationary fears.  Rising interest rates are fine for the S&P 500, so long as it's because of economic strength ahead.  But if it's to combat inflation, we have a different animal Read More 

Trading Places with Tom Bowley

Walmart Results Take A Big Bite Out Of Dow Jones, Ends Winning Streak

by Tom Bowley

Market Recap for Tuesday, February 20, 2018 Selling returned to Wall Street as its six day winning streak came to an end.  The Dow Jones was easily the biggest loser as Walmart, Inc (WMT) disappointed traders with its latest quarterly earnings report and had its worst trading day in many years, dropping more than 10%.  Here's a quick look at WMT's chart: While Tuesday's selling was bad enough, the fact that WMT could not hold the top gap support level suggests the selling isn't over.  We could see a short-term bounce at any time after such big selling, but I don't believe Read More 

Trading Places with Tom Bowley

Traders Turn Defensive As Key Fibonacci Retracement Level Reached - Bearish

by Tom Bowley

Market Recap for Friday, February 16, 2018 On the surface, Friday's action didn't seem all that bad.  While there was bifurcated action, three of our four major indices did finish in positive territory.  The aggressive small cap Russell 2000 ($RUT) led the advance.  Only the NASDAQ finished in negative territory.  The benchmark S&P 500 only gained a point, but it did manage to run its winning streak of higher prices to six consecutive sessions - a period in which the S&P 500 has risen from its low of 2532 to Friday's close of 2732.  That's 200 points of Read More 

Trading Places with Tom Bowley

Grading The Current Rally - Is It Sustainable?

by Tom Bowley

Market Recap for Thursday, February 15, 2018 Selling is inevitable during bull markets.  After each leg higher, there's typically a period of selling/consolidation.  The bulls were spoiled for several months, as the bull market advance continued nearly uninterrupted.  There really hadn't been any notable selling or consolidation since the August 2016 high.  From there, the S&P 500 fell 5% over the next three months with the Volatility Index ($VIX), at its high, reaching 23 or so.  Since that November 2016 low, the rally has been fairly steady and the VIX never Read More 

Trading Places with Tom Bowley

Wall Street Shakes Off Inflation Worries, Retail Slump; Rallies For 4th Straight Session

by Tom Bowley

Market Recap for Wednesday, February 14, 2018 Wall Street sure did look like it was heading for a very rough day at 8:30am EST on Wednesday.  Very poor economic news hit traders with a 1-2 punch as the consumer price index jumped 0.5% instead of the 0.3% that everyone was expecting.  On the heels of that, we saw the worst retail sales report in 11 months.  Retail sales fell 0.3%, while consensus estimates had predicted a rise of 0.3%.  That was a double jackpot hit for the bears.  Dow Jones futures were up approximately 130 points just before the reports hit Read More 

Trading Places with Tom Bowley

This Might Very Well Be The Best Investment Over The Next 6-12 Months

by Tom Bowley

Market Recap for Tuesday, February 13, 2018 The U.S. stock market settled down on Tuesday, trading in a much narrower range, and finished with gains across its major indices for the third consecutive day.  While it was good to see the market stabilize after such panicked selling, there remains critical overhead resistance that must be negotiated before a more meaningful rally can occur.  Let's look at the S&P 500, for instance: The rally the past two sessions has enabled the S&P 500 to test its first key Fibonacci retracement level (38.2%) at 2661.  Note that the Read More 

Trading Places with Tom Bowley

Apple Rebounds, Leads Technology Higher As Wall Street Gains For Second Straight Day

by Tom Bowley

Market Recap for Monday, February 12, 2018 Wall Street saw more gains on Monday, continuing the strength we saw late during the Friday session.  Most of the strength, however, came during the morning session as the benchmark S&P 500 hit 2660, rising 130 points or approximately 5%, off the intraday low on Friday afternoon.  That buying momentum did appear to slow Monday afternoon, though, so I'd like to see short-term gap support hold: The close on Friday was just below 2620.  If we fall below that level, we'll likely see the PPO drop beneath centerline Read More 

Trading Places with Tom Bowley

U.S. Equities Recover, Stocks To Consider On A Rebound

by Tom Bowley

Market Recap for Friday, February 9, 2018 For the first time in 18 months, the Dow Jones, S&P 500 and NASDAQ all closed out a week beneath their rising 20 week EMAs.  After not seeing a meaningful pullback (more than 3%) for well over a year, our major indices have all given up 10%+ in the past couple weeks, although each of the major indices rallied late last week to cut into those losses.  We rallied strongly in the final two hours on Friday as bargain hunters couldn't pass up their first opportunity to buy stocks deeply discounted. Read More 

Trading Places with Tom Bowley

A High VIX Means Irrational Market Swings

by Tom Bowley

Market Recap for Thursday, February 8, 2018 For now, forget about the strong earnings season that we just witnessed.  Also, forget about bond yields rising, which I view as a very bullish development generally-speaking as it allows money to rotate from the more defensive bond market to the more aggressive equity market.  What makes rising bond yields bearish is a discussion for another day, but rising from all-time lows is not a bad thing in my view so long as it accompanied a strengthening economy. At this exact moment, none of the above matters.  It's all Read More 

Trading Places with Tom Bowley

Copper Prices Remain In Strong Uptrend And That's Bullish For The S&P 500

by Tom Bowley

Market Recap for Wednesday, February 7, 2018 With the exception of a fractional gain in the small cap Russell 2000, late day selling resulted in losses on each of our major indices.  The Dow Jones spent much of the day in positive territory and sported a 270 point gain with less than a half hour to the close, but that's when we saw increased selling pressure right up to the closing bell.  The NASDAQ  100 ($NDX) showed relative weakness on the day as many of its biggest components - AAPL (-2.14%), AMZN (-1.81%), FB (-2.77%), GOOGL (-2.68%) and MSFT (-1.88%) - finished Read More 

Trading Places with Tom Bowley

I'll Step Out On That Limb, The Bottom Is In

by Tom Bowley

Market Recap for Tuesday, February 6, 2018 Volatility is the name of the game right now and big swings - both up and down - should be expected in the near-term.  Yesterday was the bulls' turn as our major indices rallied back, led by the Dow Jones' 567 point gain.  There was early selling to add on to the Monday afternoon swoon and the Volatility Index ($VIX) forged to an intraday high well into the 40s, a historical level where we've seen major S&P 500 bottoms print.  Therefore, I believe the S&P 500 trading range has now been established.  Here it is: Read More 

Trading Places with Tom Bowley

Look To VIX To Call Market Bottom

by Tom Bowley

Market Recap for Monday, February 5, 2018 What a day and especially what a final hour!  It was very reminiscent of selling episodes in 2008 where our major indices were losing a percent every few minutes.  From a bullish perspective, there's little defense from panicked selling other than to be in cash and wait out the mayhem.  Selling was everywhere.  The Dow Jones was down more than 1500 points during the final hour yesterday, but incredibly volatile action saw hundreds and hundreds of points gained and then lost in that final 60 minutes.  It was a roller Read More 

Trading Places with Tom Bowley

Stocks Slammed, Futures Lower; Here's A Possible Support Level

by Tom Bowley

Market Recap for Friday, February 2, 2018 It was an ugly day on Wall Street.  In fact, it was the ugliest day on Wall Street since June 24, 2016, when the Dow Jones last fell more than 600 points.  Friday's drop was 665 points and the technical damage was obvious.  The volume was very heavy and the rising 20 day EMA was lost for only the second time since September.  That last time, in mid-November, it was a close slightly beneath the 20 day EMA and the very next day the Dow recovered and it's been trading above its 20 day EMA ever since.  Now that the 20 day Read More 

Trading Places with Tom Bowley

AAPL, AMZN And GOOGL Report Results; Futures Tumble

by Tom Bowley

Market Recap for Thursday, February 1, 2018 We saw a lot of bifurcation in the market on Thursday.  The more aggressive NASDAQ and Russell 2000 rebounded and finished in positive territory, while both the Dow Jones and S&P 500 fell on the session.  Four sectors finished higher, while five retreated. Among the winners on Thursday, energy (XLE, +1.03%) rebounded after closing beneath its 20 day EMA the previous two days.  It was the first time we've seen the XLE close below its 20 day EMA on consecutive days since late November.  Financials (XLF, +0.94%) also Read More 

Trading Places with Tom Bowley

U.S. Equities Bounce; Small Caps Face Stiff Test

by Tom Bowley

Market Recap for Wednesday, January 31, 2018 Following the heavy selling on Tuesday, the bulls were just hoping to stop the bleeding.  I'd say they had some success as the Dow Jones, S&P 500 and NASDAQ all finished in positive territory.  Overall action was bifurcated, however, as small caps ended the session in negative territory.  In pre-market action, the latest ADP employment report showed that strength in jobs continues.  In January, the ADP report came in at 234,000 jobs, easily outpacing the 195,000 consensus estimate.  That generally bodes well for the Read More