Trading Places with Tom Bowley

Fed Rate Hike Slams Financials; Biotechs Picking Up Steam

Market Recap for Wednesday, December 13, 2017

It was a simple case of "buy the rumor, sell the news".  Financials (XLF, -1.24%) slumped on Wednesday after the Fed decided to raise interest rates another quarter point.  Higher 10 year treasury yields ($TNX) typically result in money rotating towards financial stocks.  Prior to yesterday, however, the XLF had risen 10% in a month.  That's a solid year, never mind a month!  So heading into the FOMC announcement, there surely was the possibility of a selloff and we saw it.  Financials remain very solid technically and would be an excellent reward to risk buy if key price, gap and moving average support was tested.  Check out the chart:

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Consumer Stocks Look To Lead The Bull Market Into 2018

Market Recap for Tuesday, December 12, 2017

It was mixed and bifurcated action on Tuesday.  The Dow Jones and S&P 500 continued their assault on the record books, but the NASDAQ and Russell 2000 both paused and pulled back.  With the 10 year treasury yield ($TNX) moving back above 2.40% ahead of today's FOMC announcement, financials (XLF, +1.00%) enjoyed a very nice day, while utilities (XLU, -1.71%) posted big losses and tested its 50 day SMA for the first time in nearly two months:

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Historically Low VIX Is Very Bullish For Equities; Check Out These Numbers

Market Recap for Monday, December 11, 2017

The Russell 2000 remained in true December form as it continues to struggle during the first half of the month, despite records being set on both the Dow Jones and S&P 500 on a daily basis.  It truly is an anomaly.  Since 1987, the Russell 2000 has moved higher 170 times during the first half of December, while losing ground 158 times.  So there's roughly been a 51.8% chance of small caps rising on any given day during the December 1-15 period.  But consider the second half of December where small caps have risen 64.9% of the time.  The good news for small cap investors is that we're nearly done with the first half of December.  And the best news is that the technical outlook for small caps remains quite strong:

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9 Trade Setups To Consider After Recent Selling

Market Recap for Friday, December 8, 2017

While we didn't set intraday all-time highs, we did manage to close at record levels on both the Dow Jones and S&P 500, which rose 0.49% and 0.55%, respectively, on Friday.  The NASDAQ tacked on 0.40% as it closes in on a record high close of its own (about 1% away from an all-time high record close).  Meanwhile, the Russell 2000 is doing what it typically does in the first half of December - struggle.  The RUT is down a little more than 1.5% thus far in December, but check out the Historical Tendencies section below to see the breakdown in the RUT's historical performance during December.  It's interesting to say the least.

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U.S. Equities Post Strongest Day In December

Market Recap for Thursday, December 7, 2017

December began with a huge intraday selloff and recovery and since then, it's been mostly down action.  Yesterday was the first day this month that the bulls could celebrate and feel good.  Eight of nine sectors advanced with many of the aggressive sectors leading the charge.  So while the S&P 500's modest gain of 0.29% might not have felt great, knowing that industrials (XLI, +0.92%) and technology (XLK, +0.62%) were among the leading sectors certainly helped to ease the recent pain.  Industrials, after printing a 60 minute negative divergence, saw a MACD centerline reset and a 50 hour SMA test prior to resuming its uptrend - a bullish short-term development:

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Recent Selling In Technology Improving Trading Opportunities

Market Recap for Wednesday, December 6, 2017

It was a bifurcated day on Wall Street with the NASDAQ being lifted by an improving technology sector (XLK, +0.64), while a very weak energy group (XLE, -1.30%) put the brakes on both the Dow Jones and S&P 500.  Consumer discretionary (XLY, -0.65%) continued its recent weakness off of Monday's shooting star candle.  We could see a rising 20 day EMA test on the current weakness, although I remain a big fan of this sector:

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Here's One Case For A Near-Term Top

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Dow Transports Gain 1000 Points During Last 8 Days' Melt Up

Market Recap for Monday, December 4, 2017

Recent bullish themes continued on Monday.  Outperformance by the Dow Jones (+0.24%) and S&P 500 (-0.11%) overshadowed ugly relative performance from technology (XLK, -1.61%) and the NASDAQ (-1.05%).  Even the riskier Russell 2000 index ($RUT, -0.30%) easily outperformed the NASDAQ.  The good news is that this quick correction in technology stocks is relieving prior overbought conditions and helping to remedy the momentum issues that were in place.  Check out the XLK:

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We're Quickly Approaching A Seasonal Bearish Period; Consider Taking Some Profits

Market Recap for Friday, December 1, 2017

An early selloff on Friday quickly became a buying opportunity as the bulls jumped back on board for what they hope will be another big upturn.  All of our major indices ended the Friday session in negative territory, but the losses early in the day were much, much larger.  The Dow Jones, for instance, was down 350 points a couple hours into the day, but recovered more than 300 of those points to finish down just 40.76 points.  The tech-heavy NASDAQ was down an astonishing 137 points, or roughly 2%, before reversing and finishing 26 points lower.

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The Dow Jones Has Its Biggest Gain of 2017, Closes Above 24000

Market Recap for Thursday, November 30, 2017

It was another broad-based rally on Wall Street with traders ditching bonds and rushing into equities.  The Dow Jones rallied 331.67 points to easily close above 24,000 for the first time in its history.  The records just keep piling up.  It was only 10 months ago that the Dow Jones managed to clear the psychological 20,000 level.  Since that time, we've seen the Dow rumble higher by more than 20%, taking out four 1,000 point milestones along the way.  Nothing seems to slow down this equity train with the Dow's weekly RSI now approaching 84, the most overbought it's been this century.

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