STOCKS REBOUND ON DOVISH FED STANCE -- CONSUMER DISCRETIONARY LOOKS STRONGER -- HOMEBUILDERS HIT NEW RECORDS

John Murphy
by John Murphy,
Pioneer Technical Analyst

MARKETS REBOUND... Stocks rebounded following today's dovish Fed statement.   In addition, the 10-Year Treasury yield pared some of its earlier gains.  Charts 1 and 2 show the Dow and S&P 500 touching new records.  Chart 3 shows the Nasdaq Composite trading back above its 50-day moving average.  That's where most of the afternoon's improvement was seen after some morning selling. Seven sectors are in the black with four losing ground.   Consumer discretionary is the day's strongest sector.   It's being led higher by homebuilders which are hitting new records.

Chart 1
Chart 2
Chart 3

HOMEBUILDERS LEAD XLY HIGHER...Chart 4 shows the Consumer Discretionary SPDR (XLY) finding support at its 50-day moving average and ending the day on a strong note.   It's relative strength ratio in the upper box is strengthening as well.   Homebuilders are a big reason why.   Chart 5 shows the U.S. Home Construction iShares (ITB) closing at a new record after trading lower this morning.  Its relative strength line in the upper box is rising as well.

Chart 4
Chart 5
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John Murphy
About The Author:

A trailblazer in intermarket analysis, John authored key texts that shaped technical trading and helped generations of investors decode market trends using charts and correlations. Learn More 

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