Trading Places with Tom Bowley

Watch This Transportation Ratio Very, Very Closely

by Tom Bowley

Market Recap for Monday, April 29, 2019 A bull market is comprised of a number of things, but two are wide participation and rotation of strength.  We've been seeing both.  Yesterday, it was financials (XLF, +1.01%) and communication services (XLC, +0.91%) that led the S&P 500 and NASDAQ to new record closing highs.  Banks ($DJUSBK, +1.30%) were solid and technically broke out above a key area of congestion (450-460) on their chart: The good news here is we finally saw the DJUSBK close above 460.  It's been a long time coming.  But, as with Read More 

Trading Places with Tom Bowley

Ford Lifts Autos, Healthcare Advances, And Consumer Stocks Bullish

by Tom Bowley

Market Recap for Friday, April 26, 2019 When was the last time I suggested Ford Motor Co (F, +10.74%) was a catalyst for any bull market advance?  Ummm, probably never.  But F was exactly that on Friday as much better than expected earnings lifted the stock and the automobile group ($DJUSAU, +2.42%).  The DJUSAU was the best performing industry within consumer discretionary (XLY, +0.79%) as well.  The history of relative strength among automobiles is not a good one, however: It's not easy to trust a group that's performed so abysmally vs. the S&P 500 Read More 

Trading Places with Tom Bowley

Structuring A Sound Trade And Avoiding The Relative Bear Market In Materials

by Tom Bowley

Market Recap for Thursday, April 25, 2019 Strong earnings from Microsoft (MSFT, +3.31%) and Facebook (FB, +5.85%) lifted the NASDAQ to gains on Thursday, while broader market bearishness carried the other major indices to losses.  3M Co (MMM, -12.95%) was a disaster on the Dow Jones, which lost 135 points on the session. Sector performance was bifurcated as well.  Communication services (XLC, +1.12%) and healthcare (XLV, +1.03%) were clear leaders, but industrials (XLI, -2.01%) and materials (XLB, -1.27%) were a drag on our indices.  The latter is no doubt struggling with Read More 

Trading Places with Tom Bowley

Industrials Set To Record All-Time Highs

by Tom Bowley

Note If you enjoy my daily blog articles, please subscribe (for FREE!) below.  Simply scroll to the bottom of this article, type in your email address in the space provided and click the green "Subscribe" button.  Once subscribed, my articles will be sent directly to the email address provided the moment my article is published. Thanks! Market Recap for Wednesday, April 24, 2019 Sellers in the final 20-30 minutes carried most of our major indices deeper into negative territory, although the small cap Russell 2000 showed relative strength for the second consecutive Read More 

Trading Places with Tom Bowley

NASDAQ Breaks Out, Sets New All-Time High

by Tom Bowley

Market Recap for Tuesday, April 23, 2019 The small cap Russell 2000 led our major indices higher, gaining 1.61%, but the day clearly belonged to the NASDAQ, which not only climbed 1.32%, but broke to new all-time intraday and closing highs.  The NASDAQ pierced the 8109.69 level that had been the previous closing high set on August 29, 2018.  Healthcare (XLV, +1.58%) sparked the rally, but there was wide participation.  Communication services (XLC, +1.34%), consumer discretionary (XLY, +1.20%) and technology (XLK, +1.09%) also led on a relative basis and these Read More 

Trading Places with Tom Bowley

Crude Oil Surge Sends Energy Shares Higher

by Tom Bowley

Market Recap for Monday, April 22, 2019 I'm sure you've noticed it at the pump lately.  Gas prices are rising.  Yesterday, crude oil prices ($WTIC, +2.31%) jumped to their highest level of 2019 and closed above $65 per barrel for the first time since breaking below key price support in early-November 2018.  It's been one of many themes of 2019, and if you're a fan of the correlation coefficient, then you know that higher energy prices generally coincide with higher equity prices.  Take a look: This is a 25 year look-back period.  While we've Read More 

Trading Places with Tom Bowley

An Analysis Of Financials And Why We're Going Higher

by Tom Bowley

Market Recap for Thursday, April 18, 2019 Railroads ($DJUSRR, +2.37%) were led higher by Union Pacific's (UNP, +4.36%) strong quarterly earnings report and outlook.  The DJUSRR has been a leader among industrials (XLI, +1.15%) for more than three years and that trend is easily continuing in 2019 as the group has broken out on both an absolute and relative basis: It's much easier to outperform the benchmark S&P 500 if you trade companies that belong to industry groups that are outperforming the S&P 500.  Railroads are certainly one of those industries. Read More 

Trading Places with Tom Bowley

Clothing Stocks Gearing Up For Q2

by Tom Bowley

Market Recap for Wednesday, April 17, 2019 We saw mixed trading on Wednesday with the benchmark S&P 500 falling 0.23% to end the session at 2900, still roughly 1.5% beneath the all-time high set in 2018.  Technology (XLK, +0.56%) and consumer staples (XLP, +0.50) led the action, but the continuing fall in healthcare (XLV, -2.88%) was the bigger story.  The XLV is now down 6.53% over the last week and is rapidly moving towards its 2019 low: Rising political pressure to reduce healthcare costs has been the overriding theme this past week as the XLV has reached Read More 

Trading Places with Tom Bowley

Respect That 2940 Top On The S&P 500

by Tom Bowley

Market Recap for Tuesday, April 16, 2019 It was just another day of boring gains.  But that's what happens during bull market advances.  The Volatility Index ($VIX, -1.14%) drifts lower and stock prices edge higher.  Remember when the VIX topped out with a close above 36 on December 24th?  It seems like forever ago as the VIX closed yesterday at 12.18.  I've written on many occasions that the VIX never closed below 16 during either of the past two bear markets.  With a VIX currently near 12, it's almost a foregone conclusion that we'll be breaking Read More 

Trading Places with Tom Bowley

Rotation To Defense Isn't A Bad Thing

by Tom Bowley

Market Recap for Monday, April 15, 2019 Defensive groups took their turn leading the stock market, but on a down day that is generally to be expected.  Consumer staples (XLP, +0.59%) and healthcare (XLV, +0.40%) were the two leading groups, while financials (XLF, -0.63%) backed off from its Friday strength.  More banks ($DJUSBK, -0.90%) reported their quarterly results, but market participants were unable to gather enough bullish momentum to take the DJUSBK higher to clear overhead price hurdles.  Perhaps more encouraging earnings reports from this industry this Read More 

Trading Places with Tom Bowley

All-Time Highs Approaching Plus 10 Trade Setups

by Tom Bowley

Market Recap for Friday, April 12, 2019 Who thought at our December low that the S&P 500 would rally well over 20% to above 2900 and within 1% of our all-time high in less than four months?  Not this guy.  The stock market can do anything, but if this is a bear market rally, it's unlike any we've ever seen.  Friday was the latest celebration of this Wall Street party as the Dow Jones rallied over 1% to lead our major indices higher once again.  The S&P 500 gained 0.66%, while the more aggressive NASDAQ and Russell 2000 lagged on a relative basis Read More 

Trading Places with Tom Bowley

J.P. Morgan Beats Earnings Expectations

by Tom Bowley

Market Recap for Thursday, April 11, 2019 U.S. equities finished in bifurcated fashion as a late day rally enabled the S&P 500 to eke out a miniscule 0.11 point gain (+0.00%).  The other major indices finished in negative territory, led by the 0.21% decline in the NASDAQ.  Healthcare (XLV, -1.23%) was the primary reason for yesterday's lethargic action as health care providers ($DJUSHP, -3.23%) and biotechs ($DJUSBT, -1.56%) delivered the bearish blows.  The former was a Wall Street darling in 2018, but has fallen apart in 2019 as you can see below: Read More 

Trading Places with Tom Bowley

S&P 500 Channel Suggests We'll Bust Through 3000

by Tom Bowley

Market Recap for Wednesday, April 10, 2019 Small cap stocks enjoyed a huge day, carrying Wall Street higher.  The Russell 2000 surged 1.40% and is nearing a major neckline resistance that, if broken, would suggest much higher prices for small caps: Clearing 1600 would be a big deal technically and we're not far from doing just that.  The S&P 500, which gained 0.35% yesterday, is within 2% of its all-time high, so we could see very important technical levels cleared on multiple major indices simultaneously.  It would be difficult to argue the bullish implications of Read More 

Trading Places with Tom Bowley

Financials Do Have Pockets Of Strength

by Tom Bowley

Market Recap for Tuesday, April 9, 2019 Profit taking dominated Tuesday's action with the small cap Russell 2000 leading the list of losers, dropping 1.22%.  But sellers were most everywhere as the Dow Jones, S&P 500 and NASDAQ fell 0.72%, 0.61% and 0.56%, respectively.  Nine of eleven sectors were in negative territory as well, led by industrials (XLI, -1.36%) and energy (XLE, -1.22%).  Industrial suppliers ($DJUSDS, -2.61%) were the weakest industry group in the XLI as WW Grainger (GWW, -3.07%) once again failed at overhead price resistance: Read More 

Trading Places with Tom Bowley

Energy At 5 Month High As Crude Prices Surge

by Tom Bowley

Market Recap for Monday, April 8, 2019 Crude oil prices ($WTIC, +2.09%) surged once again on Monday, and have now climbed 50% off their December low.  While energy (XLE, +0.44%) has been a major beneficiary, as we would expect, the XLE has been mired in a downtrend vs. the benchmark S&P 500.  How can that be?  If crude oil prices have risen 50% in a little more than 3 months, why aren't energy stocks soaring?  It's all about the space, about the space The U.S. Dollar Index ($USD) remains in an uptrend and the relationship between the USD and the Read More 

Trading Places with Tom Bowley

Energy Rebounds Plus 10 Trade Setups For Today

by Tom Bowley

Market Recap for Friday, April 5, 2019 Energy stocks (XLE, +1.76%) were the clear leader on Friday as Wall Street climbed once again.  Recently, crude oil prices ($WTIC, +1.58%) opened April by posting new 2019 highs, but the XLE failed to follow suit, instead falling back to test its rising 20 day EMA.  I discussed on MarketWatchers LIVE the probability that we'd see the XLE bounce off its 20 day EMA and break to new highs as the positive correlation between the XLE and WTIC is very strong.  The XLE bounced as expected: Not only did the XLE bounce, but it Read More 

Trading Places with Tom Bowley

Nonfarm Payrolls Hit A Sweet Spot This Morning

by Tom Bowley

Market Recap for Thursday, April 4, 2019 Our major indices rallied again on Thursday with the benchmark S&P 500 rising for a 6th consecutive session and closing at a 2019 high.  The S&P 500's close of 2879 was just 61 points shy of the all-time high of 2940.91 set on September 21, 2018.  Leadership came from materials (XLB, +1.01%), energy (XLE, +0.83%) and consumer discretionary (XLY, +0.81%).  Technology (XLK, -0.42%) took a rare day off as software stocks ($DJUSSW, -1.19%) lagged badly: Software has shown tremendous relative strength, though, so I'd Read More 

Trading Places with Tom Bowley

REITs Have Been Strong And This Group Loves April

by Tom Bowley

Market Recap for Wednesday, April 3 Stocks rallied again on Wednesday, primarily on the heels of materials (XLB, +1.31%) and technology (XLK, +0.81%).  The former saw relative strength in both commodity chemicals ($DJUSCC, +1.77%) and specialty chemicals ($DJUSCX, +1.39%).  The strength in the DJUSCC was very important technically as it finally cleared overhead resistance in the 450-460 range: To be clear, the breakout is very nice and bullish, but I would not ignore the bottom part of this chart where we see the DJUSCC badly underperforming the S&P 500 on a relative Read More 

Trading Places with Tom Bowley

Internet Stocks Looking Good In A Variety Of Relative Strength Ways

by Tom Bowley

Market Recap for April 2, 2019 The NASDAQ was mostly higher and strengthening throughout the session on Tuesday as internet stocks ($DJUSNS, +1.41%) continued their recent advance to challenge 2019 highs.  Facebook (FB, +3.26%) led internet stocks higher and broke out to close at its 2019 high on increasing volume, a bullish sign: Twitter (TWTR, +0.93) also rose nicely and is on the verge of filling its gap from early February.  The DJUSNS is definitely showing improving relative strength and has been since late-November.  Check out the Current Outlook section Read More 

Trading Places with Tom Bowley

Financials Benefiting From Rising Treasury Yields

by Tom Bowley

Market Recap for Monday, April 1, 2019 U.S. equities had a stunning first quarter and Monday was an encore to open up Q2.  Keep in mind that we’ve entered the most bullish period within April historically as the NASDAQ has produced annualized returns of +21.45% from April 1 through April 18 since 1971.  If we strip out April 13and 14, which are typically down days (perhaps to raise cash for April 15 income taxes?), the annualized return jumps to 31.17%. It’s not unusual for the stock market to make a significant run higher into the start of quarterly earnings Read More 

Trading Places with Tom Bowley

Key Relative Strength Signs Pointing To Higher Equity Prices

by Tom Bowley

Market Recap for Friday, March 29, 2019 The U.S. stock market rallied on Friday, putting an exclamation point on its best calendar quarter in 10 years.  Of course, this strength came on the heels of an incredibly dismal quarter to end 2018.  Healthcare (XLV, +1.20%) and industrials (XLI, +1.08%) led the bullish assault, while energy (XLE, -0.15%) and real estate (XLRE, -0.03%) trailed the field. Most areas within healthcare were strong, but biotechnology ($DJUSBT, +1.89%) and medical supplies ($DJUSMS, +1.83%) were the clear winners.  A huge winner in biotech was Celgene Read More