STOCK INDEXES HOLD THEIR GAINS -- COMMUNICATION SERVICES SPDR NEARS RECORD HIGH -- GOOGLE, DISNEY, AND CHARTER COMMUNICATIONS HIT NEW RECORDS -- ENERGY SPDR MEETS SELLING AT 200-DAY LINE -- SO DOES CRUDE OIL AND DB COMMODITY INDEX
MAJOR STOCK INDEXES HOLD THEIR GAINS... The first three charts below show the major stock indexes holding onto their November gains. All three remain above their July highs which should now provide support on any pullbacks. [Broken overhead resistance becomes new support. That's why the red horizontal trendlines have turned green]. In addition, they remain above all three moving average lines (green 20, blue 50, and red 200-day). And those three lines remain in positive alignment. The only short-term concern is that the 9-day RSI lines (upper boxes) have moved into overbought territory over 70. That could slow the advance somewhat, and lead to a period of consolidation within the overall uptrend. But isn't enough by itself to end the price advance.
MOST SECTORS ARE UP... Seven sectors are in the black today including real estate, materials, communications, cyclicals, utilities, industrials, and financials. A drop in bond yields is giving a short-term boost to dividend-paying stocks. Losers include healthcare, technology, staples, and energy (more on that shortly). The most interesting chart belongs to communication stocks.
COMMUNICATION SPDR NEARS RECORD HIGH... Several sector SPDRs have already reached record highs. Another one may be soon added to the list. Chart 4 shows the Communication Services SPDR (XLC) testing its July intra-day peak at 51.75. A close above that level would put the XLC at a record high. Its relative strength ratio in the upper box has been lagging behind the S&P 500 for nearly three months. An upside breakout by the XLC could start to change that for the better. A number of its larger stocks are leading it higher. Like Alphabet (GOOGL), Disney (DIS), and Charter Communications (CHTR).
XLC LEADERS HIT NEW RECORDS... Alphabet (GOOGL) is the biggest stock in the XLC. And Chart 5 shows it clearing its spring intra-day high to hit a new record. Its relative strength ratio (upper box) has been rising since July. Chart 6 shows Walt Disney (DIS) surging above its July peak to reach a new record yesterday. Its relative strength ratio (upper chart) surged as well. Chart 7 shows Charter Communications (CHTR) moving further into record territory after a bullish breakout during September (green circle). Its relative strength ratio in the upper box may be nearing a record of its own.
ENERGY SPDR AND CRUDE OIL STALL AT 200-DAY LINES...Energy stocks were the day's biggest loser. Chart 8 shows the Energy SPDR (XLE) backing off from resistance at its red 200-day moving average; and dropping back to its 50-day line. The commodity is also stalled at its red line. Chart 9 shows the United States Oil Fund (USO) also meeting some resistance at its 200-day line. That helped prevent an upside breakout in commodity prices in general.
Chart 10 shows the Invesco DB Commodity Index (DBC) slipping back below its 200-day line (red circle); after pulling back from a falling trendline drawn over its April/September highs. An index of industrials metals also weakened at its 200-day line.
