Trading Places with Tom Bowley

Sellers Stampede Wall Street; Dow Jones Tumbles 362 Points

by Tom Bowley

Market Recap for Tuesday, January 30, 2018 This day was a long time coming.  The U.S. stock market's uninterrupted surge to record all-time highs day after day, week after week and month after month needed a break.  It needed relief.  Yesterday that relief was found.and it came in a hurry.  We saw significant gaps lower on all of our major indices and we closed near the day's low on both the Dow Jones and S&P 500.  Action on the NASDAQ was actually somewhat bullish as this tech-laden index finished with a slightly hollow candle, meaning that it closed above Read More 

Trading Places with Tom Bowley

Apple Tests Major Support As Its Earnings Report Nears

by Tom Bowley

Market Recap for Monday, January 29, 2018 We saw something different in the U.S. stock market on Monday.  We closed in negative territory on all of our major indices and we closed at or near lows for the day.  There was little or no bargain hunting at the end of the session.  So is that it?  Have we come to the end of this bull market rally?  Well, I'd say it's premature to start that dialogue, despite red futures this morning.  We are dealing with some short-term negative divergences on our hourly charts, however, so we could be in for another day or two of Read More 

Trading Places with Tom Bowley

Bulls Stomp On The Gas, Biotechs Explode

by Tom Bowley

Market Recap for Friday, January 26, 2018 The bears were absolutely stymied on Friday as the major indices surged to unprecedented levels.  Despite the very overbought conditions that have persisted on many indices for four months now, bulls dominated the action and show no signs of letting up.  When you see a rally like the one we saw on Friday, it's bullish.  But it's particularly bullish when you witness the type of leadership we saw.  While the defensive-oriented healthcare sector (XLV, +2.15%) led the rally, the strength within that space came from biotechnology Read More 

Trading Places with Tom Bowley

Utilities Rebound; Dow Jones Sets Fresh Record

by Tom Bowley

Market Recap for Thursday, January 25, 2018 Utilities (XLU, +1.55%) easily enjoyed its best day of 2018 on Thursday as significant price support, combined with falling treasury yields, triggered an explosive move higher as buyers could not get enough of the beaten-down sector.  Here's the chart: The green shaded area provided the support and encouragement the bulls needed to make a stand and yesterday's move higher was accompanied by excellent volume.  So we definitely want to respect the 49.50-50.50 area as a major price support zone.  To the upside, I'm watching two key Read More 

Trading Places with Tom Bowley

Strength In Banks And Insurance Lead Bifurcated Market

by Tom Bowley

Market Recap for Wednesday, January 24, 2018 Only the Dow Jones was able to end Wednesday's session in positive territory, but all of our major indices remain very strong with accelerating bullish price momentum.  Sectors and industries have taken their turns leading U.S. stocks higher and yesterday it was banks ($DJUSBK) and insurance - full line ($DJUSIF), brokers ($DJUSIB) and life ($DJUSIL).  The 10 year treasury yield ($TNX) jumped three basis points to 2.65% and that sent traders right back into interest-sensitive stocks that benefit from higher rates. Read More 

Trading Places with Tom Bowley

Utilities Lead As Market Rally Pauses; PCLN breaks out

by Tom Bowley

Market Recap for Tuesday, January 23, 2018 The tech-laden NASDAQ powered forward to new all-time highs on Friday, closing above 7400 for a second consecutive session and now approaching 7500.  All of our major indices ended higher, except for the Dow Jones, which saw a last minute bout of selling to finish 3 points lower.  In an unusual twist, utilities (XLU) gained 0.96% to top the sector leaderboard.  The XLU has bounced repeatedly in the 49.50-50.50 level, so Tuesday's strength shouldn't come as a big surprise to technicians. Consumer discretionary Read More 

Trading Places with Tom Bowley

Energy Soars But Its Relative Strength Might Surprise You

by Tom Bowley

Market Recap for Monday, January 22, 2018 There was a lot of good things happening on Monday.  First of all, one of the worst days historically has been the Monday after options expiration Friday.  That historical weakness never materialized yesterday as all of our major indices trended up throughout the entire session with the NASDAQ and Russell 2000 closing above 7400 and 1600, respectively, for the first time in their histories.  Strength was felt in nearly every corner of the market, but most notably in energy (XLE, +2.16%), consumer discretionary (XLY, +1.11%) and Read More 

Trading Places with Tom Bowley

Retail Jumps Again, Leads U.S. Stocks To More Record Highs

by Tom Bowley

Market Recap for Friday, January 19, 2018 Strength resumed on Friday, with three of our four major indices closing at record highs.  Only the Dow Jones managed to come up short as losses in Dow components IBM, General Electric (GE) and American Express (AXP) held back the index, although it too managed to finish in higher territory, just not record high territory.  Nike (NKE) soared more than 4% on Friday to lead the Dow Jones. The S&P 500 was lifted mostly by retailers.  One look at the top performing S&P 500 stocks from Friday and you'll see a Read More 

Trading Places with Tom Bowley

My Trading Strategy In An Overbought Bull Market

by Tom Bowley

Market Recap for Thursday, January 18, 2018 Thursday was not a great day for the bulls.  We haven't seen too many times since the August low where all of our major indices finished lower on the session.  Yesterday, however, was one of those days.  But the action recently in the gambling index ($DJUSCA) perfectly illustrates how you can find trading gems in the market despite wildly overbought market conditions.  Take a look at the DJUSCA chart: Gambling stocks have been one of the leaders over the past week, but check out how this group opened 2018 - while Read More 

Trading Places with Tom Bowley

For The S&P 500, Today's Close Is Historically Significant

by Tom Bowley

Market Recap for Wednesday, January 17, 2018 The Dow Jones didn't fail this time.  After Tuesday's huge reversal from above the 26,000 level, there were a number of question marks about whether the current rally would continue.  The Dow Jones answered those questions rather emphatically with its first close above 26,000 in history.  The Dow Jones has now cleared its fifth psychological thousand point level in the past six months, truly astounding. Leadership on Wednesday came from an important area of the market - technology (XLK, +1.50%).  Semiconductors Read More 

Trading Places with Tom Bowley

Big Selling Hits Wall Street; Here's What To Watch On Wednesday

by Tom Bowley

Market Recap for Tuesday, January 16, 2018 Tuesday was perhaps the most bearish day we've seen in quite awhile.  For starters, volume on our major indices was the heaviest in the past 6-7 weeks, excluding option expiration Friday on December 15th.  But the heavy volume, by itself, wasn't the problem.  It was the fact that it accompanied a very significant reversal in price action.  The S&P 500 and NASDAQ both printed reversing dark cloud cover candles and the Russell 2000 printed a bearish engulfing candle.  Check out the charts: Read More 

Trading Places with Tom Bowley

Media Agencies, Consumer Discretionary Lead Latest Advance

by Tom Bowley

Market Recap for Friday, January 12, 2018 U.S. equities had another nice rally on Friday, this time led by a very strong consumer discretionary sector (XLY, +1.29%).  Eight of the nine sectors finished higher, with utilities (XLU, -0.57%) the only area failing to participate.  The XLU tends to struggle when treasury yields are rising, but the past three days have seen the XLU free fall while the 10 year treasury yield has essentially been flat.  It's likely that technical selling is gripping the XLU and, if that's the case, technical buying should soon be here to rescue the Read More 

Trading Places with Tom Bowley

Small Caps Lead With Powerful Rally; Airlines Prepared For Takeoff

by Tom Bowley

Market Recap for Thursday, January 11, 2018 The small cap Russell 2000 ($RUT) led U.S. indices higher on Thursday with more across-the-board record highs being set.  The RUT gained 1.73%, more than doubling the advance on any of the other major indices.  There were plenty of reasons, but leadership from energy (XLE, +2.05%) and consumer discretionary (XLY, +1.63%) played a huge role.  The candle that printed on yesterday was the most bullish kind - the marubozu candle where prices open on the low, we see buying throughout the day, and we finish on the high.  Check out Read More 

Trading Places with Tom Bowley

Major Indices Fall, But Pare Losses

by Tom Bowley

Market Recap for Wednesday, January 10, 2018 We saw losses across our major indices on Wednesday, but the bulls spent most of the day recovering from steeper losses just after the opening bell.  Losses were inconsequential as they ranged from 0.02% on the aggressive Russell 2000 (small caps) to a whopping (sarcasm) 0.14% on the NASDAQ.  Before the market opened on Wednesday, reports were circulating that China might slow or completely halt their purchases of U.S. treasuries and that had the double effect of (1) sending traders to the exits in the bond market, with corresponding Read More 

Trading Places with Tom Bowley

JNJ Breaks Out; Why Pharmas Could Lead The Market In 2018

by Tom Bowley

Note At the bottom of this article, you can type in your email address and hit the green "Notify Me" button to subscribe to my blog for FREE!  Then my article will immediately be sent to your email address upon publishing.  Thanks! Market Recap for Tuesday, January 9, 2018 It took quite a bit of effort for the bears to stop the bulls' winning streak, but the bulls returned the favor on Tuesday with little effort at all.  Ho-hum, it was just another 100 point day for the Dow Jones.  It doesn't seem to matter which sector or two take a pause as many others Read More 

Trading Places with Tom Bowley

The Dow Jones Ends Its 2018 Winning Streak.....Barely

by Tom Bowley

Market Recap for Monday, January 8, 2018 After mostly a weak start on Monday, our major indices resumed their bullish ways and finished with positive returns.  The lone exception was the Dow Jones, which dropped 13 points to end its impressive winning streak to open 2018.  Weakness in Unitedhealth Group (UNH), Goldman Sachs (GS), Walt Disney (DIS) and General Electric (GE) held back an otherwise strong Dow Jones.  Caterpillar (CAT) rose another 2.5% yesterday and is off to a stellar start in 2018. Biotechnology ($DJUSBT) pulled back to test its rising Read More 

Trading Places with Tom Bowley

No Jobs? No Problem! U.S. Equities Soar Despite Weak Report

by Tom Bowley

Market Recap for Friday, January 5, 2018 Not even a disappointing jobs report on Friday could slow down this bull market train.  U.S. futures were strong before the release of December's nonfarm payrolls and they didn't give up a thing after the release, which showed that jobs were reported at 148,000, well short of the 191,000 forecast.  The bond market did initially react as you might expect - with a quick drop in the 10 year treasury yield ($TNX) as soon as the weak jobs report hit the wires.  Check it out on a 5 minute intraday chart: Read More 

Trading Places with Tom Bowley

Global Markets Rally, U.S. Futures Higher; Nonfarm Payrolls On Deck

by Tom Bowley

Market Recap for Thursday, January 4, 2018 Where's the top?  Who knows and the bulls don't seem to care.  As of Wednesday, the Dow Jones was left out as the only index not to clear a psychological or significant price level for the first time ever in 2018.  No worries, though, we can now cross that off the market's "To Do" list as the Dow Jones closed above 25,000 yesterday for the first time ever, rising another 152 points in the process. Financials (XLF, +0.93%) and materials (XLB, +0.87%) led the charge on Thursday, with utilities (XLU, -0.83%) once Read More 

Trading Places with Tom Bowley

Here's A Must-Own Industry Group For 2018 And A Very Bullish Relative Breakout

by Tom Bowley

Market Recap for Wednesday, January 3, 2018 We're only two trading days into 2018 and already we've seen the S&P 500's first close ever over 2500, the NASDAQ's first close ever above 7000, the Russell 2000's first close ever above 1550.  Dow, where art thou?  Well, the Dow Jones may need another day before exceeding 25,000 for the first time ever.  Let's give the Dow a little wiggle room.  After all, the Dow surged past 22,000 in September, 23,000 in October and 24,000 in November.  That index missed the thousand point train in December, but looks to Read More 

Trading Places with Tom Bowley

Bulls Open 2018 With A Party Like It's 1999

by Tom Bowley

Market Recap for Tuesday, January 2, 2018 The NASDAQ loves January and January loves the NASDAQ.  If there's one month where the NASDAQ really shines on a relative basis, it's January (see Historical Tendencies below) and that index opened the new year like it owns January.  It was a very solid day across most areas, but the NASDAQ's 1.50% push higher easily outperformed its index peers and it also enabled the index to do something it's never done before - close above 7000.  It wasn't too long ago when we wondered if the NASDAQ would ever reach those year 2000 Read More 

Trading Places with Tom Bowley

Here's One Chart That Screams BUY As We Begin 2018

by Tom Bowley

Special Note First, I'd like to wish everyone a Happy New Year!  Let's make 2018 our best yet!  Here are a couple of quick reminders: (1) If you like my Trading Places blog and you'd like to follow my articles every morning, scroll down to the bottom of this article, type in your e-mail address and click on the green "Notify Me!" button.  You'll then become a (FREE!) subscriber and my article will be sent to the email address you provide IMMEDIATELY after I publish it. As always, thanks for your loyalty and readership, it's much appreciated! Read More