AUTOS, BANKS, AND RAILS HAVE A STRONG DAY -- LEADERS INCLUDE BAC, GM, AND CSX -- AUTO STRENGTH MAY BE BOOSTING PALLADIUM AND PLATINUM ISHARES -- MOVING AVERAGE TRENDS SHOW IMPROVEMENT
MORE STOCKS ARE TRADING ABOVE MOVING AVERAGE LINES... One of my recent concerns about the stock market rally was the fact that a smaller percentage of stocks were trading above moving average lines. That situation, however, has shown noticeable improvement. The blue line in Chart 1 plots the NYSE Percent of Stocks Above 50 Day Moving Averages ($NYA50R). The current reading of 74% is still lower than last years higher readings. However, it has just recently climbed above its January peak near 72%. That upside breakout has reversed the downtrend in that line that started last October. Chart 2 also shows improvement in the NYSE Percent of Stocks Above 200 Day Moving Average ($NYA200R). The red line is well below the higher numbers at the start of last year. The good news is that it has just broken out to the highest level since last May. That means that more stocks are now participating in the market's uptrend.
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Chart 1
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Chart 2
NYSE COMPOSITE INDEX IS NOW TRADING AT A NEW RECORD ... Not only are more NYSE stocks now trading above 50- and 200-day moving averages. The NYSE Index is also breaking out. The monthly bars in Chart 3 show the NYSE Composite Index ($NYA) trading above its 2007 intra-day high at 10387. That's another good sign for the market's long term trend.
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Chart 3
BAC, CSX, AND GM ARE MARKET LEADERS... Three of the day's strongest groups are banks, rails, and autos. Three of the top stocks in each groups are shown below. Chart 4 shows Bank of America (BAC) climbing more than 2% today and nearing a test of its January high. Its relative strength line (above chart) is also climbing. Chart 5 shows CSX rising 1%. Its relative strength line has also turned up. GM has been an underachiever in the auto group. Not today. Chart 6 shows General Motors (GM) gaining 2%. The stock is now well above its 200-day average, and is trying to clear its 50-day line. Its relative strength line is stabilizing after a three-month downtrend.
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Chart 4
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Chart 5
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Chart 6
PALLADIUM AND PLATINUM TURN UP... Palladium and platinum prices are jumping today. Part of that may be tied to a strong auto sector (both metals are used in auto catalytic converters). And part may be due to tensions with Russia (which is a big producer of both commodities). But they are rising. Chart 7 shows Palladium Shares ETF (PALL) climbing to the highest level since last June. Chart 8 shows Platinum Shares (PPLT) rising to the highest level in six months.
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Chart 7
