BROADCOM LEADS SEMICONDUCTOR SPDR HIGHER -- RETAIL SPDR WEAKENS AHEAD OF RETAIL SALES -- HOME CONSTRUCTION SPDR CHALLENGES RANGE RESISTANCE -- TOLL BROTHERS CHALLENGES RESISTANCE - PLUS DHI AND PHM -- FACEBOOK AND LINKEDIN GET SOME MOJO BACK

BROADCOM LEADS SEMICONDUCTOR SPDR HIGHER... Link for today's video. Programming note: Yesterday's video was truncated at the 15 minute mark and did not include the last section, which was a demo on using the SCTR tables. This video has since been fixed to include the last section. Sorry for any inconvenience. remaining an Semis continued their run with the Semiconductor SPDR (XSD) showing upside leadership in a mixed market early Tuesday. I highlighted XSD on December 3rd as it broke above wedge resistance and John Murphy featured the MarketVectors Semiconductor ETF (SMH) on December 7th as it hit new highs. Chart 1 shows XSD breaking wedge resistance in late November and challenging the October high today. Broken resistance in the 57.5-58 area turns first support. A move below 57.5 would negate the breakout and call for a reassessment. The October-November lows mark key support in the 55.5-56 area. The indicator window shows the price relative turning up over the last three weeks and breaking the October trend line. Semis are starting to show relative strength again and this is positive for the tech sector. Note that XSD is a broad-based semiconductor ETF with over 50 semiconductor stocks. Chart 2 shows BroadCom (BRCM) breaking above triangle resistance last week and exceeding its September high today. Also notice that the MACD Histogram broke out of its range to turn momentum bullish.

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Chart 1

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Chart 2

RETAIL SPDR WEAKENS AHEAD OF RETAIL SALES... This is going to be a big week for retail because the Commerce Department will report November retail sales on Thursday before the open. This report will, of course, include black Friday and gray Thursday, or whatever they are calling those days now. In any case, retail spending drives some two thirds of GDP and retail stocks are integral to the consumer discretionary sector. Chartists, therefore, should keep an eye on the Retail SPDR (XRT) for clues on the economy and the broader market. Chart 3 shows XRT within a long-term uptrend and a rising channel the last eight months. Short-term, the ETF fell the last eight days and started lagging the S&P 500. So far, I would consider this a correction within the bigger uptrend. Broken resistance, the consolidation in late October-early November and the late April trend line combine to mark a support zone in the 84 area. The indicator window shows the price relative flattening out over the last five months. This means XRT is performing in line with the S&P 500 since early July. Short-term, the price relative fell in December and is nearing the low end of its five month range. XRT is an equal-weighted ETF with over 90 retail-related stocks. Chart 4 shows retail leader Macy's (M) breaking to new highs in mid November and pulling back in December.

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Chart 3

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Chart 4

HOME CONSTRUCTION SPDR CHALLENGES RANGE RESISTANCE... The Home Construction SPDR (ITB) has a slight uptrend at work since early September, but this uptrend has yet to achieve breakout velocity and ITB is still underperforming the broader market. Homebuilders are also part of the consumer discretionary sector and an important component in the economy. Chart 5 shows ITB breaking the May trend line with a surge in September and then trading sideways the last three months. The ETF met resistance in the 23.5 area in each of the prior three months. With another gain today, ITB is once again poised to challenge resistance here. Even though resistance has held and the price relative has been flat since mid August, I am more bullish than bearish towards this group. First, ITB sports a series of rising troughs since early September. Second, the S&P 500 is trading near all time highs and the broader market remains strong. Third, the economy remains strong and this could offset the recent uptick in interest rates. As far as the slight uptrend in ITB is concerned, I would mark support in the 21.5-22 area (early Sept trend line and November low).

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Chart 5

TOLL BROTHERS CHALLENGES RESISTANCE - PLUS DHI AND PHM... Toll Brothers (TOL) is providing a lift to the home builder group after the company reported earnings this morning. Despite this bounce, chart 6 shows the stock hitting resistance just like ITB. TOL has been locked in a long consolidation since early June. Support is in the 30 area and resistance resides in the 35 area. On the plus side, the stock shows a series of rising peaks and troughs since mid October, and I would mark upswing support just above 32. Chart 7 shows DR Horton (DHI) making a go at resistance from the October-November highs. Chart 8 shows Pulte (PHM) with an uptrend since mid August and support in the 16.5 area.

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Chart 6

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Chart 7

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Chart 8

FACEBOOK AND LINKEDIN GET SOME MOJO BACK... After a corrective period, Facebook (FB) and LinkedIn (LNKD) are perking up again and leading in December. Chart 9shows Facebook hitting new highs in October and then correcting with a falling wedge. The stock broke above the wedge trend line in late November and continued above its 50-day moving average in December. The indicator window shows the price relative turning up the last two weeks as Facebook starts to outperform again.

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Chart 9

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Chart 10

Chart 10 shows LinkedIn with an ABC correction extending from early September to early November. The stock managed to firm in the 210 are for much of November and then surged above its November high the last three days. The indicator window shows the price relative turning up the this month and challenging the early September trend line.