STOCK INDEXES REGAIN 50-DAY LINES -- ENERGY AND FINANCIALS ARE STRONGEST SECTORS -- INDUSTRIALS AND MATERIALS BOUNCE OFF 200-DAY AVERAGES

STOCKS MAKE UP LOST GROUND...Two strong days in a row have more than made back losses suffered on Monday.   In addition, some of the short-term technical damage has been repaired.   More specifically, 50-day moving averages that were broken on Monday have been regained on the S&P 500 and Nasdaq market.   The Dow is also heading back to its 50-day line as shown in Chart 1.   Charts 2 and 3 show the S&P 500 and Nasdaq Composite indexes climbing back above their 50-day lines and downside gaps formed on Monday.    That's a sign of strength.   Stocks are also trading higher on the week even after Monday's sharp plunge.  Today's rally is broad based with ten of eleven sectors in the black.

ENERGY AND FINANCIALS ARE DAY'S STRONGEST SECTORS...Higher energy prices continue to benefit energy shares which are the day's strongest sector.   Chart 4 shows the Energy Sector SPDR (XLE) trading today at the highest level in more than two months.   Financials are right behind.   Chart 5 shows the Financial Sector SPDR (XLF)  having an especially strong day after regaining its 50-day line.   Rising bond yields are contributing to that buying.

INDUSTRIALS AND MATERIALS REBOUND FROM 200-DAY LINES...Two of the weakest sectors of late are among the day's sector leaders and are bouncing off moving average support.   Chart 6 shows the Industrial Sector SPDR (XLI) bouncing off long-term support at its 200-day moving average.    Chart 7 shows the Materials Sector SPDR (XLB) doing the same.  That's an encouraging sign for them and the rest of the market.