MAJOR STOCK INDEXES CLEAR LATE-MARCH HIGH -- ALL SECTORS ARE IN THE GREEN -- ENERGY AND MATERIALS ARE LEADING -- TECH SPDR IS TESTING ITS 200-DAY AVERAGE -- SO ARE SEMICONDUCTORS
STOCK INDEXES CLEAR LATE-MARCH HIGH...The stock market is building on yesterday's strong gain to improve its short- to intermediate trend picture. The daily bars in Chart 1 show the S&P 500 rising above its late-March intra-day peak at 2641 after clearing its green 20-day average yesterday. The SPX has also cleared its lower 38% Fibonacci retracement line which is another positive development. That may pave the way for the SPX to reach its 50% retracement line which could provide its next test. The SPX, however, remains well below its 50- and 200-day moving averages. And its blue 50-day line remains below its red 200-day line (blue circle). Those are negative features. The question of whether a bottom has been formed is still in play. But at least the stronger short-term trend is encouraging.
ALL ELEVEN SECTORS RISING... All eleven market sectors are rising. Among the day's leaders are energy, materials, financials, cyclicals, and technology. The Energy SPDR (XLE) has risen to the highest level in a month with some help from a more stable oil market. Energy traders are looking forward to an OPEC and Russia led meeting this Thursday which might lead to some production cuts. Financials are getting some help from Treasury yields which have risen over the last two days. Cyclicals are seeing some bargain-hunting in beaten down travel and tourism stocks, along with retailers. Materials are being led higher by aluminum and copper producers (as copper prices rebound). Gold is pulling back a little after touching a seven-year high. The technology sector is testing its 200-day average.
TECH SPDR AND SEMIS ARE TESTING 200-DAY LINES... The daily bars in Chart 2 show the Technology Sector SPDR (XLK) already testing its red 200-day average. That's an important test for it, and possibly for the rest of the market. Chart 3 shows the PHLX Semiconductor iShares (SOXX) doing the same. Those are important tests of overhead resistance, and could tell us a lot about the staying power of this week's stock advance.
