Trading Places with Tom Bowley

The VIX Signals No Bear Market On The Horizon......Yet

Market Recap for Monday, April 10, 2017

It was a back and forth kinda day on Wall Street with the finish coming up fairly flat with minor gains across the board.  Tesla (TSLA) and Harley Davidson (HOG) were winners and helped lead automobiles ($DJUSAU) to leadership in the consumer discretionary sector (XLY, +0.37%).  TSLA has been particularly strong since breaking out of a bullish cup with handle pattern.  Take a look:

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Biotechs Consolidating But Technicals Improving

Market Recap for Friday, April 7, 2017

Consumer staples (XLP, +0.27%) and healthcare (XLV, +0.18%) were the sector leaders on Friday as our major indices finished near the flat line.  Money rotated a bit towards defensive stocks, although utilities (XLU, -0.43%) failed to follow its defensive counterparts higher.  Among industry groups, the Dow Jones U.S. Defense Index ($DJUSDN) saw buying after the Thursday Syrian missile attacks, bouncing off a key price support level.  Take a look:

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Fed Minutes Spook Traders; Afternoon Selloff Spoils Big Rally

Market Recap for April 5, 2017

The release of the FOMC minutes was widely anticipated to see if there were any hidden nuggets of information from the last Fed meeting.  Traders apparently were not happy that the Fed is discussing an unwinding of its balance sheet earlier than expected.  That piece of information was primarily responsible for a very significant reversal in our major indices - one of the largest reversals in the past year.  The Dow Jones was sailing along, up nearly 200 points in the first hour of trading and wasn't far from its all-time high.  Then 2pm hit and all those gains were lost and the Dow Jones finished down 41 points on the session.  Check it out:

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Retailers Continue To Hold Back Consumer Discretionary Stocks

Market Recap for Tuesday, April 4, 2017

U.S. equities opened lower on Tuesday, but steadily marched higher throughout the day, finishing with mostly small gains across the board.  The small cap Russell 2000 was an exception as it fell for a second consecutive session.  That follows a winning streak of seven straight days just prior.  Energy (XLE, +0.73) led the recovery with materials (XLB, +0.36%) and utilities (XLU, +0.31%) also performing well.  The latter has been attempting a breakout, but with two key obstacles.  First, there's a clear negative divergence indicative of slowing momentum and, second, the 10 year treasury yield ($TNX) is very close to support.  The XLU would benefit from a breakdown in the TNX, but I would not expect one given the pattern.  Check this out:

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Tesla Charged Up To Lead Automobiles

Market Recap for Monday, April 3, 2017

It was a rough day on Wall Street to open the month of April, but an afternoon rally did minimize any damage technically.  The Russell 2000, the recent leader among our major indices, was trampled and lost 1.17%, while the Dow Jones rally fell just shy of the breakeven point.  I find strong relative performance in small caps to be a signal of higher prices ahead, but the relative downtrend of the Russell 2000 vs. the benchmark S&P 500 was again being tested and thus far it's failed.  Check this out:

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MarketWatchers LIVE Starts Today!!!

Special Announcement

I'm very excited to announce the beginning of our new show featuring me and Erin Heim.  We'll have fun covering the global markets, discussing stocks on the move, providing technical analysis education and highlighting the various tools available here at StockCharts, among other subjects.  The show is FREE and you don't need to register for the event or download any software.  Simply click on the button that will be provided on SharpCharts and other pages and join the show!  We'd love to see you!

To watch today's show, CLICK HERE.

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Banks At Critical Resistance Short-Term; Railroads Strengthening

Market Recap for Thursday, March 30, 2017

It was another strong day on Wall Street Thursday as six sectors advanced while only three declined - utilities (XLU, -0.78%), consumer staples (XLP, -0.20%) and energy (XLE, -0.02%).   The four "power" sectors, the aggressive groups, finished 1-2-3-4 yesterday so clearly money rotated to offense - a very good sign.  In fact, that rotation to aggressive areas of the market this week is illustrated in the Current Outlook section below.

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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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