MATERIALS ETF HITS NEW HIGH -- FREEPORT MCMORAN COPPER & GOLD IS BREAKING OUT -- SEMIS ARE LEADING TECHS HIGHER -- QQQQ IS TESTING 50-DAY LINE
MATERIALS SELECT SPDR IS BREAKING OUT... With commodity prices on the rise again, the Materials Select Sector SPDR (XLB) is attempting a bullish breakout today. Chart 1 shows the XLB trading over its fourth quarter high near 30. Its relative strength line has been rising for the past three weeks. Chart 2 puts the group in better perspective. It shows that the Materials ETF has been climbing impressively throughout the last two years -- and is now trading at the highest level in six years. The Materials Sector SPDR is one way to benefit from rising commodity prices. One of the day's top performers is Freeport McMoran Copper & Gold which is benefiting from recent gains in both of those commodities.
Chart 1
Chart 2
FREEPORT MCMORAN IS CLOSE TO A BREAKOUT ... With the recent rebound in copper and gold prices, it's no surprise to see FCX moving higher as well. Its daily chart shows the stock having recently bounced off its 200-day moving average. It appears to be on the verge of breaking through its December-January highs and a down trendline drawn over its October/November highs. Its relative strength line, which had been declining since early October, also appears to be turning up.
Chart 3
NASDAQ 100 HITS MONTHLY HIGH ... After lagging behind the rest of the market since December, the Nasdaq 100 Shares (QQQQ) are finally starting to show some upside leadership. The daily chart shows the QQQQ trading at the highest level in a month and close to challenging the 50-day moving average at 38.54. A close over that resistance line would be a positive sign. The QQQQ/S&P 500 ratio line along the bottom of the chart is also showing signs of turning higher. If that continues, that should give a boost to the entire market, which usually does better when the Nasdaq market is showing some leadership. It's getting a lot of help from Internet and semiconductor stocks -- as well as biotechs.
Chart 4
SEMIS ARE LEADING TECHNOLOGY RALLY ... After breaking through the 200-day average last week, the Semiconductor Holders (SMH) are continuing to rally. That's lending a lot of support to the technology sector. Chart 6 shows the Internet B2B Holders bouncing off their 200 day average for the second time in a month. Biotech Holders (Chart 7) are also bouncing off their 200-day average.
Chart 5
Chart 6
Chart 7
CORRECTION ON JAPANESE ETF ... The chart I showed yesterday of the Japan iShares omitted some data at the end of the chart. Fortunately, that didn't effect its bullish look. In fact, it looks even stronger. Here's what the chart looks like through today. Chart 9 gives a closer look at the more recent action. It shows the EWJ starting to climb on rising volume. Some of its strength is coming from a stronger yen (Chart 10).
Chart 8
Chart 9
Chart 10
