CSX AND UNITED AIRLINES LEAD TRANSPORTS HIGHER -- AND BOOST THE INDUSTRIAL SPDR -- FREEPORT MCMORAN LEADS MATERIALS HIGHER -- SIX-YEAR HIGH IN ALUMINUM PUSHES ALCOA TO NEW RECORD -- ENERGY AND METALS LEAD COMMODITIES SHARPLY HIGHER
TRANSPORTS NEAR UPSIDE BREAKOUT ... Monday's message showed the Dow Transports rising above their 50-day average to turn their trend higher. Chart 1 shows the Dow Transports on the verge of breaking through overhead resistance formed in late February and mid-March. While rails and truckers (and FedEx) were Monday's leaders, airlines are today's standout group. Chart 2 shows the NYSE Airline Index ($XAL) jumping 3% today after finding support near its 200-day average. It's also close to exceeding its 50-day moving average. While several airlines are having a strong day, the group leader is UAL. Chart 3 shows United Continental Holdings (UAL) surging more than 6% which puts it well above both moving average lines. Rails are also having another strong day, and one rail stock in particular. Chart 4 shows CSX gapping 7% higher which puts the rail leader at a new record high. Strong transportation stocks are helping boost another market. And that's the Industrial SPDR.
(click to view a live version of this chart)
Chart 1
(click to view a live version of this chart)
Chart 2
(click to view a live version of this chart)
Chart 3
(click to view a live version of this chart)
Chart 4
TRANSPORTS LEAD INDUSTRIAL SPDR HIGHER... Chart 5 shows the Industrial Sector SPDR (XLI) trading above its 50-day average today. It's also on the verge of clearing a three-month downtrend line. The XLI is the day's second strongest sector behind energy. Its relative strength ratio (top of chart) is also starting to rise. The XLI includes transportation stocks. And four of its five biggest percentage gainers today are transports -- CSX, United, American and Southwest Airlines.
(click to view a live version of this chart)
Chart 5
ALUMINUM AND COPPER STOCKS LEAD MATERIALS HIGHER ... Materials stocks are the day's third strongest group. Chart 6 shows the Materials SPDR (XLB) rising above its three-month downtrend line after clearing its 50-day line yesterday. Its relative strength ratio (top box) has also turned up this month. A lot of that buying is coming from stocks tied to industrial metals like aluminum, copper, and steel. And that's coming from a sudden jump in the prices of base metals. Aluminum in particular has surged to the highest price in six years. The price of copper is also rallying today. That's helping make Freeport McMoran the day's biggest percentage gainer in the XLB. Chart 7 shows Freeport McMoran (FCX) gapping up through a three-month trendline. Chart 8 shows Alcoa (AA) surging above its January high to a new record.
(click to view a live version of this chart)
Chart 6
(click to view a live version of this chart)
Chart 7
(click to view a live version of this chart)
Chart 8
COMMODITIES ARE JUMPING... Commodity prices are on a tear today. Chart 9 shows the Bloomberg Commodity index jumping to the highest level since late January. Most of the commodity strength is coming from energy and metals. Crude oil is up sharply today. But so is the price of silver, palladium, copper, and aluminum. Some of the metals buying is coming from fears of shortages resulting from sanctions against Russia which is a big producer of aluminum and other metals. A 3% jump in the price of crude oil to another three-year high made energy the day's strongest market sector.
