UTILITIES AND CONSUMER STAPLES START THE MORNING -- BANKS DON'T BOUNCE -- PRECIOUS METALS TRY TO MOVE HIGHER -- $WTIC TAKES OFF FROM THE 200 DMA PLATFORM
UTILITIES AND CONSUMER STAPLES START THE MORNING... After a big up day like yesterday, we would like to see follow through in the growth sectors. Unfortunately, Thursday started off with more upside for utilities and consumer staples. Chart 1 from the sector summary page shows the leaders in green.
While the $COMPQ had a big upside rally on Wednesday, the $SPX and the $INDU were more muted. We like to see the $COMPQ lead as it has more growth oriented stocks rather than value. So that is a positive. We will need to see follow through in the coming days if this is the start of something stronger. Today's top corner looks weaker on Chart 2 as the $COMPQ is making large percentage drops relative to the $INDU and the $SPX.
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Chart 1
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Chart 2
BANKS DON'T BOUNCE... Banks don't like it when clients bounce cheques and investors don't like it when banks don't bounce on a big up day with the market. On Tuesday, the Market Message was pointing to a critical time to watch the banks stocks for early signals. Tuesday's Message During yesterdays big move on the back of the Fed minutes, the bank stocks ended the day flat. That relative performance change is not bullish. I think KBE could be a very important chart over the next few weeks with close scrutiny required. Today the SCTR on Chart 3 sits below 50 which is very weak for an important sector. Its weak status comes from the fact that it just lost support of the 75 line on the SCTR recently and bounced back up. To fall back below 75 so quick, indicates the trend is weakening in my interpretation. The Red arrow was from Tuesday's note.
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Chart 3
PRECIOUS METALS TRY TO MOVE HIGHER... GLD was back above the 20, 50 and 200 DMA at Wednesday's close. I'm watching for a quick reversal if the $USD starts to shoot up. Until then, the ride looks higher. I think stops are critical at this time as the reversals are quick. The broader precious metals group was having a big day today as shown on Chart 5. Platinum and Palladium followed Silver's big move higher.
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Chart 4
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Chart 5
$WTIC TAKES OFF FROM THE 200 DMA PLATFORM... Oil is interesting here. It found support and has now made big pushes above a flat 200 DMA. This $104 Level we are approaching looks very important as shown on Chart 6. This is a nice place for the MACD to find support. The SPURS relative performance for XLE has been bullish. While the ratio is pointed straight up, it looks like it is moderating slightly as it tests the underside of the trend line. If the ratio falls apart as crude tests 104, it is a good clue for us. We like it when the equities lead the commodity. Should XLE keep firing higher, we would expect oil to have more strength as well.
