Trading Places with Tom Bowley

The Superfecta: All Four Major Indices Print All-Time Record Highs

Market Recap for Tuesday, November 21, 2017

I am traveling for the Thanksgiving Day holiday, so today's article will be brief.  I hope everyone has a very Happy Thanksgiving!  Enjoy your family and friends and please be safe.  :-)

It was a very bullish day on Wall Street yesterday.  Not only did we see all four of our major indices climb to touch all-time highs on an intraday basis, but they also closed there.  In addition, all nine sectors advanced on the session.  That is typically a sign of new money driving prices higher, a bullish development indeed.  Should the 10 year treasury yield ($TNX) move above its triangle resistance (see Current Outlook section), that would provide another catalyst to take U.S. equities higher.


Technology (XLK, +1.05%), healthcare (XLV, +0.88%) and industrials (XLI, +0.72%) were the leaders with the latter's strength enough to catapult it back above 20 day EMA resistance:

That's a solid initial signal of strength returning to that sector and that should help to sustain the current breakout and rally.

Pre-Market Action

Crude oil ($WTIC) is on the move once again, rising this morning to $57.76 per barrel, or 1.64%.  That should provide a lift to energy stocks right on time as this group has struggled the past two weeks.

Look for more strength in U.S. equities today with Dow Jones futures up 37 points with approximately 30 minutes left before today's opening bell.  Wall Street will close on time today at 4pm EST, but Friday's session will be an abbreviated one, with the U.S. stock market closing at 1pm EST.

Current Outlook

The action in the 10 year treasury yield ($TNX) continues to trade in a narrowing and squeezing symmetrical triangle.  A breakout to the upside in the TNX would aid the S&P 500 as it moves into record high territory.  Here's the current technical view:

A breakout in the TNX would reflect money moving away from bonds and that selling could provide a big spark to equities.

Sector/Industry Watch

Healthcare (XLV) bounced off key price and trendline support on Tuesday and one big reason was the medical equipment ($DJUSAM) stocks.  This group made another breakout yesterday, rising 1.64% to easily clear ascending triangle resistance:

Historical Tendencies

Volume tends to be extremely light on the Wednesday before and Friday after Thanksgiving.  It will be difficult to jump to too many conclusions the next couple days based on volume.

Key Earnings Reports

(actual vs. estimate):

DE:  1.57 vs 1.46

Key Economic Reports

October durable goods released at 8:30am EST:  -1.2% (actual) vs. +0.4% (estimate)

October durable goods ex-transports released at 8:30am EST:  +0.4% (actual) vs. +0.5% (estimate)

Initial jobless claims released at 8:30am EST:  239,000 (actual) vs. 240,000 (estimate)

November consumer sentiment to be released at 10:00am EST:  98.1 (estimate)

Happy Thanksgiving and happy trading!

Tom

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