Trading Places with Tom Bowley

Russell 2000 Soars After Nearing Initial Fibonacci Retracement Level

Market Recap for Thursday, November 16, 2017

U.S. indices spiked sharply higher on Thursday's open in contrast to many recent days where the bulls have found themselves underwater in early action, trying to reclaim control of the action throughout the balance of the session.  Yesterday, there wasn't a battle.  The bulls won decidedly and with one day of solid gains, the benchmark S&P 500 is within earshot of 2600 and another all-time high.  But the big winner among the major indices was the Russell 2000 ($RUT, +1.56%), whose swift march higher reversed several days' worth of selling.  While the NASDAQ's gain of 1.30% resulted in a fresh all-time high close, technically the RUT's big day was more impressive because it held on to a very critical support level before its big rise:

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Selling Grips Wall Street, Key Moving Average Lost

Market Recap for Wednesday, November 15, 2017

Eight of nine sectors lost ground on Wednesday and while that, along with a couple major indices closing beneath their respective 20 day EMAs, might be cause for concern, I actually thought much of the action was bullish.  First and foremost, the tech-heavy NASDAQ was able to rally enough in the afternoon to end with a kick save, printing a reversing candle in the process:

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Technology Weakening, But How Much Selling Might We Expect?

Market Recap for Tuesday, November 14, 2017

For the third time in the last four days, we saw U.S. equities gap lower, only to reverse intraday to close near their highs of the session.  It's still resulted in losses for the day, but it also shows the bull market resiliency that the bears are facing as they try to grab control of the near-term action.  We're seeing fairly significant red futures once again this morning so the bulls will once again attempt to reclaim support by day's end.

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Industrials Are Teaching Us How To Evaluate Risk....If We'll Listen

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Market Recap for Monday, November 13, 2017

Monday marked more rotation from the overbought and momentum-challenged aggressive sectors to the more defensive-oriented groups.  The current short-term rotation as the benchmark S&P 500 consolidates to work off its own overbought issues should not be interpreted as a bearish development.  However, continuing relative strength in defensive sectors to accompany the next S&P 500 breakout would begin to paint a much more cautious picture so we'll need to keep that on our radar.

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Consumer Staples Finish Off Strong Week, Hold Trendline Support

Market Recap for Friday, November 10, 2017

Generally speaking, I'm not a big fan of defensive areas leading the market to the upside.  But I'll make an exception for last week.  Consumer staples (XLP, +1.02%) was not only the clear leader on Friday, but it's weekly gain of 2.15% also easily vaulted the XLP into a leadership role for the week.  Why was the XLP's strength last week so important?  Well, first take a look at the weekly chart:

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Early Losses Result In Successful Moving Average Tests; Overbought Conditions Unwinding

Market Recap for Thursday, November 9, 2017

Energy (XLE, +0.30%) returned to the top of the leaderboard and this is what's likely to irritate the bears in the future.  We now have another sector that's technical capable to take on new money as money rotates elsewhere.  It's the beauty of a bull market.  Wide participation means a lot of choices.  The problems begin when breakdowns occur in several areas and money can't find a new technical home.  Consumer discretionary (XLY, +0.15%) also had a solid day considering the overall market weakness as its recent breakout is also encouraging buyers - even on down market days.

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Futures Down Sharply; The 9th Calendar Day Of Month Strikes Again

Market Recap for Wednesday, November 8, 2017

It was another day of records for most of our major indices with the Dow Jones, S&P 500 and NASDAQ all closing at their highest levels ever.  Consumer staples (XLP, +1.09%) led the advance and I feature this group in the Sector/Industry Watch section below, showing how it's recovered nicely following a recent breakdown in price action.

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Russell 2000 Takes Biggest Hit In Three Months; Watch This Support Level

Market Recap for Tuesday, November 7, 2017

Small cap stocks felt a slight tremor on Tuesday as the Russell 2000 ($RUT, -1.26%) suffered its worst day in nearly three months.  While losses never feel good, I believe the RUT is in a bullish advance similar to the one it enjoyed in 2013 with weekly price momentum accelerating after a 50 week SMA test in August.  That would indicate that the rising 20 week EMA should provide excellent support:

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Energy Explodes Higher As Crude Oil Tops $57 Per Barrel; Time For Small Caps Again?

Market Recap for Monday, November 6, 2017

Energy (XLE, +2.29%) shares made a huge advance on Monday as money rotated to this once-forgotten sector in a very big way.  Bull markets thrive on broad participation in rallies and the XLE had been one sector not participating.  That is no longer the case as all technical signs point to higher prices in this space.  Here's the latest look at the XLE:

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Familiar Names Pace Healthcare, Technology; Major Indices Rise Again

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Facebook Falters After Earnings, NASDAQ Now Looks To Apple's Strong Report

Market Recap for Thursday, November 2, 2017

Financials (XLF, +0.94%) and industrials (XLI, +0.57%) led a Dow Jones rally on Thursday.  Goldman Sachs (GS) paced the financial stocks in the Dow with more than a 1% gain, while Boeing (BA) was the best performing Dow component and the obvious leader in industrials.  It was not really a broad-based rally on Thursday, however, as the NASDAQ actually lost ground despite an early push higher in Facebook (FB) following its better-than-expected quarterly earnings report.  It was likely a "buy on rumor, sell on news" type of even for FB as solid earnings were anticipated by traders, especially after seeing Amazon.com (AMZN), Microsoft (MSFT), Alphabet (GOOGL) and Intel (INTC) all report such great quarterly results and watching all four stocks gap higher in response.  FB was up temporarily in after hours trading on Wednesday, but gapped lower at the opening bell yesterday.  It has short-term support in the 174-176 area as follows:

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Transportation Services Is A Live Case Study In Rotation After A Negative Divergence

Market Recap for Wednesday, November 1, 2017

U.S. stocks jumped higher out of the gates at Wednesday's open, but was unable to hang onto those gains - especially on the NASDAQ.  We did see a bit of strength in the final couple hours, though, after the FOMC policy announcement stated that interest rates would remain unchanged for now with a potential rate hike in December.  Traders expect that rate hike so there was a bit of relief perhaps that no action was taken currently.

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