DOW HITS 30,000 -- ENERGY AND FINANCIALS LEAD MARKET HIGHER -- BANK INDEX ACHIEVES BULLISH BREAKOUT -- SMALL CAPS SHOW NEW LEADERSHIP -- ANOTHER ENERGY ETF IS RISING
DOW REACHES 30K... Chart 1 shows the Dow Industrials hitting 30,000 and setting a new record. The S&P 500 isn't far behind. Chart 2 shows the S&P 500 in a coiling pattern which also favors higher prices. The Nasdaq is lagging behind but also gaining ground. Chart 3 shows the Invesco QQQ Trust still consolidating below its recent highs. With money pouring into more economically-sensitive stock groups, technology stocks have been lagging behind the rest of the market. All eleven sectors are in the black with energy and financials in the lead. A strong airline group is helping push the Dow Transports into record territory. The NYSE Airline Index has reached the highest level in eight months. Small caps are also hitting a new record and leading the rest of the market higher.
BANKS ACHIEVE BULLISH BREAKOUT... The Financial SPDR (XLF) has reached the highest level since February. Banks continue to lead it higher and are achieving a bullish breakout of their own. Chart 4 shows the KBW Bank Index rising above its June high to reach the highest level in more than eight months.
SMALL CAPS ARE LEADING THE WAY... Small cap stocks are hitting new records each day and continue to lead the rest of the market higher. Chart 5 plots a ratio of the Russell 2000 iShares divided by the S&P 500 (IWM:$SPX) and shows it rising to the highest level of the year. The chart also shows the ratio having risen above a falling trendline extending back to the middle of 2018. That marks a major change for small caps from market laggards to market leaders. Small cap leadership is usually a vote of confidence in the stock market and economy.
ANOTHER ENERGY ETF IS RISING... Yesterday's message showed two energy ETFs that were benefiting from rising oil prices (XLE and OIH). Chart 6 shows the S&P Oil & Gas Exploration & Production SPDR (XOP) rising above their August high today (as are the other two ETFs shown yesterday). Crude oil is having another strong day.
