S&P 500 CLEARS ITS 200-DAY MOVING AVERAGE -- COMMODITY STOCKS CONTINUE TO LEAD -- UTILITIES HIT A NEW RECORD

STOCKS ADVANCE FOR A SECOND WEEK...Major U.S. stock indexes gained ground for the second week in a row building the case for a short-term bottom having been formed.   And one of them has cleared an important resistance line.  Chart 1 shows the S&P 500 moving back above its 200-day moving average which is an encouraging sign.  The SPX may now test its early February high just shy of 4600.  Chart 2, however, shows the Dow Industrials still trading below their red line.  Chart 3 shows the QQQ Trust trading below its 200-day average as well.  So more work needs to be done to solidify the price rebound.   In all three cases, declining volume detracts somewhat from the stronger price action.   Stocks advanced despite a 10% gain in the price of crude oil and a big jump in Treasury yields.  And a more aggressive Fed.

COMMODITY STOCKS LEAD...Given the continuing rally in commodity markets, it's not surprising to see commodity stocks helping to lead the market higher.   The week's two top sectors were energy and materials.   Chart 4 shows the Energy Sector SPDR (XLE) nearing its high for the year.  While Chart 5 shows the Materials Sector SPDR (XLB) surging to the highest level in two months.   It was led higher by stocks tied to steel, aluminum, and copper.   Other weekly leaders were technology and financials.  The week's strongest chart action, however, was seen in utilities.

UTILITIES HIT A NEW RECORD... Chart 6 shows the Utilities Sector SPDR (XLU) surging to a new record high this week.   Historically, utilities have usually done relatively well in a rising rate environment.