Trading Places with Tom Bowley

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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Fed Hikes Rates, But No New Hike Expectations Revealed

Market Recap for Wednesday, March 15, 2017

The Federal Reserve's latest policy meeting has come and gone.  As expected, the FOMC announcement at 2pm EST indicated that rates would be hiked another quarter point.  But the real question was whether the Fed would turn more hawkish on future hikes.  They did not.  They maintained their cautiously optimistic view of the economy in 2017 and stuck with their previous forecast of three rate hikes in 2017.  That simply wasn't enough to trigger a breakout in the 10 year treasury yield ($TNX) as the current yield range from 2.30%-2.62% was maintained as you can see below:

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Technology Showing Signs Of Slowing Momentum

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Footwear Is Strengthening; Here's My Choice In The Space

Market Recap for Monday, March 13, 2017

There really was very little movement in our major indices or in our sectors on Monday - which for Monday isn't really a bad day.  But my guess is that traders are a bit cautious ahead of what many perceive will be another rate hike on Wednesday.  I believe the hike is a foregone conclusion, so I'll be paying more attention to what Fed Chair Yellen has to say about the Fed's thoughts about the balance of 2017.  It's a guess on my part, but look for the Fed to keep its hawkish tone.

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Failure Of Treasury Yields Slow Financial Stocks

Market Recap for Friday, March 10, 2017

U.S. equities posted mostly strong results on Friday with a bit of relative strength from the more aggressive NASDAQ and Russell 2000.  The NASDAQ 100 ($NDX) posted the best percentage gain of all, but keep in mind that the NDX does not include financial stocks and that area suffered from the 10 year treasury yield's ($TNX) inability to break above key yield resistance at 2.62%.  Take a look at the TNX:

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Weakening Aluminum, Steel And Gold Pressure Materials Stocks

Market Recap for Thursday, March 9, 2017

The March 6th to 9th period once again produced not-so-good S&P 500 results.  The S&P 500 did break its recent string of losses, gaining two points on Thursday.  Technically, it bounced exactly where we would expect - off the rising 20 day EMA.  Take a look at the following chart:

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Record Crude Inventories Sink Oil, S&P 500

Market Recap for Wednesday, March 8, 2017

The S&P 500 fell for a third consecutive day and it could have been five days in a row if not for a very small gain last Friday.  The culprit yesterday was quite clearly the oil patch.  The U.S. crude oil inventory surged higher by 8.2 million barrels to an all-time record high of 528.4 million barrels.  It was a shock as expectations called for just a 2 million barrel rise.  That much higher build in inventory sent oil prices crashing lower to just above the $50 per barrel level, easily its lowest close in 2017.  Here's the chart:

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Treasury Yield Shows Building Expectations For Next Rate Hike

Market Recap for Tuesday, March 7, 2017

Next Tuesday, another FOMC meeting begins with their policy decision announced next Wednesday.  Expectations are that we'll see another quarter point rate hike.  It's not a slam dunk and there are some who believe we should wait to see more economic strength before raising rates again.  I expect that the Fed will want to remain ahead of the curve so I'm looking for that next hike.  The treasury market agrees with me.  After consolidating its last rise, the 10 year treasury yield ($TNX) is again on the move higher.  Here's a long-term chart:

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