Trading Places with Tom Bowley

Retailers Lead Bifurcated Rally; What We Should Look For In April

Market Recap for Wednesday, March 29, 2017

We haven't discussed leadership from retail (XRT) in quite some time, but we saw many retailers outperforming on Wednesday.  The obvious question is whether this leadership will continue for an extended period.  Well, first keep in mind that retail typically excels during the month of March - and it's almost over.  April's also a strong seasonal period, however, so perhaps we'll see this week's strength accelerate.  Check out the historical pattern over the past 12 years:

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Excellent Market Leadership Snaps Dow's 8 Day Losing Streak

Market Recap for Tuesday, March 28, 2017

The bullish action couldn't have been much better on Tuesday.  Money clearly rotated back to aggressive areas of the market as the Dow Jones advanced for the first time in the last nine trading sessions.  This bullish rotation will be key should we see another break to all-time highs on our major indices.  Technically, we just saw 50 day SMA tests on the Dow Jones, S&P 500 and NASDAQ for the first time since this bull market rally began in November 2016.  The Dow's losing streak enabled its RSI to fall from the mid-80s to open March to a low of 40 yesterday.  The strength we saw yesterday also followed the bullish reversing candle that had printed on Monday.  Take a look at the DIA (ETF that tracks the Dow Jones) chart:

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Dow Jones Falls For 8th Straight Day, Tests 50 Day

Market Recap for Monday, March 27, 2017

It was yet another bifurcated day in the market with the Dow Jones losing ground for the eighth straight session and the S&P 500 joining the Dow in negative territory.  For the second consecutive session, the NASDAQ and Russell 2000 bucked the selling and finished in positive fashion.  Healthcare (XLV, +0.27%) led to the upside as biotechnology ($DJUSBT) nearly tested its rising 20 week EMA before bouncing - great action.  Check out the biotechs:

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Dollar Threatening A Major Breakdown, Gold A Beneficiary

Market Recap for Friday, March 24, 2017

Friday was another day of bifurcated action with both the NASDAQ and Russell 2000 higher while the Dow Jones and S&P 500 lagged and finished lower.  Sector performance wasn't any better with four sectors higher and five lower.  To make matters worse, leadership was mixed between aggressive and defensive groups.  The defensive utilities (XLU, +0.37%) sector was the best group and we've seen a breakout in this area in the past week.  However, the XLU has printed a negative divergence, a sign of slowing momentum.  Here's the chart:

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Biotechnology's Recent Failure Is Disappointing But All Hope Is Not Lost

Market Recap for Thursday, March 23, 2017

The Russell 2000 gained on Thursday while the other major indices declined slightly due to a selloff in the final three hours.  Six of nine sectors finished in negative territory, led by energy (XLE, -0.41%).  Oil & equipment services ($DJUSOI) led the decline in energy, setting a fresh recent low.  The good news, however, is that price support is being tested as the index prints a positive divergence.  Here's the chart:

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Transports Mixed Technically As Market Rally Stalls

Market Recap for Wednesday, March 22, 2017

A strong technology sector (XLK, +0.63%) helped to lift the NASDAQ to moderate gains while the other major U.S. indices waffled near the flat line on Wednesday, a day after equities experienced their sharpest selling of 2017.  From a bullish perspective, it was calming to see stocks maintain their resiliency.  It would have been easy to see much more selling yesterday as follow through from Tuesday, but outside of a little early morning weakness, it never materialized.

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U.S. Stocks Tumble Most Since September

Market Recap for Tuesday, March 21, 2017

After months of steady gains, Tuesday's action was painful with eight of nine sectors lower - the utilities sector (XLU, +1.39%) was the lone exception.  Further, our major indices were led to the downside by the more aggressive Russell 2000, which dropped 2.71%.  The biggest losses were felt in banks ($DJUSBK) where the group tumbled more than 4%.  Stocks like Deutshe Bank (DB, -7.07%) and Bank of America (BAC, -5.81%) led a brutal day for the industry.  There are a couple things to consider technically with the banks now.  First, let's take a look at the weekly chart:

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NASDAQ's Negative Divergence Holding The Market At Bay

Market Recap for Monday, March 20, 2017

Financials (XLF, -0.73%) led the market lower on Monday as short-term price and gap support was lost on one of the best performing sectors since the early November run.  While I don't view this as a big technical development in the long-term, it's worth noting that the door has been opened to further selling in the near-term.  Here's the chart of the XLF:

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Tires Gaining Traction, Ready To Put Your Portfolio In Overdrive

Market Recap for Friday, March 17, 2017

It was another bifurcated day in the market on Friday as rotation continued.  The Dow Jones and S&P 500 both posted minor losses while the Russell 2000 led with a 0.40% gain.  Utilities (XLU, +0.60%) and industrials (XLI, +0.55%) were the sector winners while financials (XLF, -0.98%) and healthcare (XLV, -0.55%) were the laggards.

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Homebuilders Hot; DR Horton Forms Cup, Lennar Tests High

Market Recap for Thursday, March 16, 2017

Home construction ($DJUSHB) continued its torrid pace of recent gains, rising another 2% on Thursday.  Since January 23rd, the DJUSHB has jumped roughly 20%.  That's a great year by any measure, yet we're only talking the past two months performance.  Momentum is very strong and volume trends are bullish as well.  I see few signs of this group letting up and expect that, based on pattern measurement, the DJUSHB could hit 800 before this relative strength ends.  Here's the chart:

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