UPS IS LEADING TRANSPORTS HIGHER TODAY -- SO ARE CH ROBINSON AND AMERICAN AIRLINES -- SMALL AND MIDSIZE STOCKS ARE ATTRACTING NEW BUYING -- SEMICONDUCTOR ISHARES HIT A NEW RECORD -- SO ARE TEXAS INSTRUMENTS AND LAM RESEARCH
UPS GIVES BIG BOOST TO TRANSPORTS...The recent upturn in transportation stocks is starting to gain more traction. Chart 1 shows the Dow Transports rebounding nicely from last week's late selloff; that's helping to restore the bullish upturn that occurred at the start of last week. That's also keeping the TRAN well above its 50- and 200-day moving averages. This week's buying has been led by airlines and truckers. Most of today's buying, however, is coming from delivery service stocks. And UPS in particular.
Chart 2 shows United Parcel Service (UPS) gapping up more than 7% today; and in position to challenge its April intra-day peak at 113.94. Truck and airline stocks are also contributing. Chart 3 shows C.H. Robinson Worldwide (CHRW) rising above its 200-day average. While Chart 4 shows American Airlines (AAL) doing the same.
SMALLER STOCKS ARE ALSO DOING BETTER...Smaller stocks that have been lagging behind large cap stocks are also starting to do better. Chart 5 shows the S&P 400 Mid Cap Index ($MID) climbing today to the highest level in three months; and nearing a challenge of its late-April peak. A close above that spring high would consitute a bullish breakout and put the midcap index at the highest level since last October. Smaller stocks are rallying today as well.
Chart 6 shows the Russell 2000 Small Cap Index ($RUT) surging today as well. Small caps have lagged far behind larger stocks this year. The histogram bars, however, shows small stocks showing new leadership today (as are midcaps). Buying in smaller stocks would help broaden out the market rally and reduce the divergence between small and large cap stocks. The fact that the Financials SPDR (XLF) is hitting a new high for the year today may be helping. Financials are the biggest part of the Russell 2000 Index.
SEMICONDUCTOR ETF HITS NEW RECORD...Chip stocks are having a strong week and are leading the tech sector higher today. And they're having a very strong chart day. Chart 7 shows the PHLX Semiconductor iShares (SOXX) rising above their late April peak to establish a new record. Their relative strength ratio (upper box) is nearing a record as well. Texas Instruments (TNX) is leading the chip group to new records today. Chart 8 shows Lam Research (LRCX) doing the same.
