Trading Places with Tom Bowley

Tom Bowley
About the author: co-founded Invested Central and served as the site's Chief Market Strategist for more than 10 years. His unique trading style combines both his fundamental and technical strategies to systematically manage risk while trading. A regular contributor to StockCharts.com's bi-weekly ChartWatchers newsletter since 2006, Tom's role at StockCharts has expanded significantly since he joined the company as a full-time Senior Technical Analyst in March of 2015.

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Trading Places with Tom Bowley

10 Year Treasury Yield Explodes To 7 Year High; Financials Lead

by Tom Bowley

Market Recap for Wednesday, October 3, 2018 The 10 year treasury yield ($TNX) did the inevitable - it closed above 3.11% and the TNX now resides at a level not seen since 2011.  There will be those who say that higher interest rates will be the beginning of our next recession.  Eventually they could be right, but in the foreseeable future, I'm not buying it.  The Fed's rate hiking campaign, and the subsequent breakout in the TNX, is occurring off historic lows.  We haven't been in an environment like our current one since the 1960s.  Our economy is growing Read More 

Trading Places with Tom Bowley

Defensive Stocks Lead Bifurcated Market

by Tom Bowley

Market Recap for Tuesday, October 2, 2018 The Dow Jones rallied for a fourth consecutive day to close in all-time record high territory, eclipsing the previous high set on September 21st.  Unfortunately, the rest of the market didn't get the memo as small cap stocks, in particular, were sold off rather rudely.  While the Dow Jones was gaining more than 100 points, the Russell 2000 lost more than 1% for a second consecutive day to open up the fourth quarter.  The interesting part is that this isn't unusual historically for the Russell 2000 (more on that below in Historical Read More 

Trading Places with Tom Bowley

New Trade Deal Leads Autos And Dow Jones Higher

by Tom Bowley

Market Recap for Monday, October 1, 2018 The big news was the United States, Canada and Mexico agreeing to replace the North American Free Trade Agreement (NAFTA) and automobile manufacturers ($DJUSAU, +5.84%) were the clear winners.  The group also benefited from a quick settlement between the SEC and Tesla's (TSLA, +17.35%) CEO Elon Musk for his infamous tweet regarding "funding secured" to take TSLA private.  The SEC said Musk had no such funding in place and simply manipulated the price of TSLA's stock for which he, along with TSLA, each agreed to a $20 million fine Read More 

Trading Places with Tom Bowley

This Software Company Blew Out Earnings In August, Could Be Bottoming Short-Term

by Tom Bowley

Market Recap for Friday, September 28, 2018 Friday saw very choppy action to close out the 3rd quarter.  The good news is that Q3 typically represents the U.S. market's weakest quarter in terms of performance.  However, this year saw significant gains over the summer months as the S&P 500 opened the quarter at 2718 and closed it at 2914, representing a nearly 200 point gain - one of the best Q3s on record.  The NASDAQ opened the quarter at 7510 and gained more than 500 points.  Healthcare (XLV, +14.68%) and industrials (XLI, +10.21%) both gained more than 10% Read More 

Trading Places with Tom Bowley

Apple Nears Breakout, Leads NASDAQ; Small Caps Lag

by Tom Bowley

Market Recap for Thursday, September 27, 2018 Utilities (XLU, +1.03%) rebounded solidly on Thursday after trending lower most of September.  The group appeared to benefit from the failure of the 10 year treasury yield ($TNX) to break out.  3.11% is yield resistance on the TNX from the May 2018 high, which is also a 7 year high.  If you look at the following chart, as the TNX hit that yield resistance and failed to break out, the XLU began to form a bottoming reverse head & shoulders pattern: Communication services (XLC, +0.86%) and technology (XLK, +0.59%) Read More 

Trading Places with Tom Bowley

The Fed Takes A Stand....And It's Not Accommodative

by Tom Bowley

Market Recap for Wednesday, September 26, 2018 The FOMC raised its fed funds rate a quarter point at 2pm EST yesterday as expected, but as usual, it's not what the Fed does, it's what it says.  Perhaps the most significant part of the Fed's prepared remarks was where it changed its wording from the previous meeting to remove "accommodative", referring to its stance on a forward looking basis.  After a knee-jerk reaction higher, the market's "true reaction" surfaced and we saw nearly two hours of selling into Wednesday's close.  The 10 year treasury yield ($TNX), at very Read More 

Trading Places with Tom Bowley

Energy Leads; Exploration & Production Stocks Test Major Resistance

by Tom Bowley

Market Recap for Tuesday, September 25, 2018 Almost.  That's the word that came to mind while watching energy stocks into the close on Tuesday.  Yes, the group is in the midst of a significant short-term rally, but when given the opportunity to clear multi-month price resistance, they came up a bit short.  Energy (XLE, +0.64%) and consumer discretionary (XLY, +0.42%) showed relative strength on a day when U.S. stocks were searching for leadership, but the following chart highlights the technical issues ahead for energy and one of its key industry components: Read More 

Trading Places with Tom Bowley

Steel Quietly Resting, But Looking Solid For Q4 Run

by Tom Bowley

Market Recap for Monday, September 24, 2018 Energy (XLE, +1.46%) had a very strong day on Monday, helping to offset what was otherwise a rather poor day for U.S. equities.  Technology (XLK, +0.50%) was aided by its four key components - computer hardware ($DJUSCR, +1.17%), internet ($DJUSNS, +0.79%), software ($DJUSSW, +0.57%), and semiconductors ($DJUSSC, +0.41%) - to enable the NASDAQ to rally into positive territory in the afternoon session after opening much lower.  The Dow Jones opened lower, but never really saw much buying interest throughout the session as industrials Read More 

Trading Places with Tom Bowley

This NASDAQ Support Zone Is Important And Needs To Hold

by Tom Bowley

Market Recap for Friday, September 21, 2018 Bifurcation was once again apparent on Wall Street to close out last week.  The Dow Jones was able to finish higher and extend its trek into record high territory, while the S&P 500 was essentially flat.  The NASDAQ and Russell 2000, however, were met with sellers and both closed down fairly significantly - 0.51% and 0.46%, respectively. The problem, clearly, was that three aggressive sectors struggled simultaneously.  Consumer discretionary (XLY, -0.44%), technology (XLK, -0.39%) and financials (XLF, -0.39%) led Read More 

Trading Places with Tom Bowley

Can You Correctly Answer This Historical Tendencies Trivia Question? I Doubt It

by Tom Bowley

Market Recap for Thursday, September 20, 2018 Dow Jones, welcome to the party!  It's been eight months since the Dow Jones could say it closed in record all-time high territory, but that's what happened at yesterday's close.  The Dow Jones joined the S&P 500, NASDAQ and Russell 2000, all of which have regularly been producing record high closes.  While the NASDAQ and Russell 2000 both enjoyed gains yesterday of approximately 1%, they have more work to do to get back into record high territory.  I don't believe it'll take too long, however, as we're Read More 

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