FINANCIALS HELP LEAD MARKET HIGHER
FINANCIALS SPDR TRADING OVER 200-DAY AVERAGE... Financial stocks are helping lead the market in another test of 200-day moving averages. Chart 1 shows the Financials Select Sector SPDR trading just above that reistance line near mid-day. The relative strength line along the bottom of the chart has turned up since the start of April -- and has been showing market leadership since then. It's usually a good sign for the market when the financials are showing good relative strength. Some of the day's individual stock leaders are in bank, brokerage, and insurance.
Chart 1
FINANCIAL LEADERS... Shown below are the day's top percentage gainers in the financial sector. JP Morgan is the top gainer and appears headed toward its January high near 28. Marsh and McLennan is just now moving over its 200-day line. Merrill Lynch did two weeks ago.
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DOW AND NASDAQ OFF TO GOOD START... The Dow is up more than a hundred points -- and is once again challenging its 200-day moving average. The sideways pattern in effect for the past four weeks has the look of a consolidation pattern rather than a reversal pattern. That increases the odds for an upside resolution. The Nasdaq Composite is retesting support at the bottom of the "price gap" left behind last Monday. This would be a logical spot for new buying to emerge.
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BOND YIELDS TESTING AS WELL... The yield on the 10-year T-Note also is making another run at its 200-day moving average. Its recent sideways pattern looks "triangular" in shape which suggests a higher trend. That would be bad for bonds but good for stocks.
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