US stocks showing constructive upside folllow-through with breakouts back to new 2016 highs on the SPX, DJIA and NDX as Financials help to lead the charge- While S&P futures are diverging from this move in the cash indices, with S&P June futures still trading below early April highs, (which are being challenged now intra-day) the fact that Discretionary and Industrials are outperforming along with Financials gives the market a much needed tailwind which adds credibility to this move.
The chart above highlights the bullish breakout of XLF back above the recent range, which most Ellioticians might call the start of WAVE 5 HIGHER off the Feb lows. Key to mention is the fact that Relatively speaking, XLF vs SPX has broken out of this recent downtrend, (AS SHOWN IN THE BLUE RELATIVE CHART above price, which should help this group outperform in the near-term
DJIA, along with SPX, NDX, have all broken back out to new highs for 2016- This puts US indices only about 1% below All-time highs from last year, with the next key area of resistance found at last Nov/Dec highs- DJIA, while rarely watched in the US, still has a 90%+ correlation to the SPX
TRANSPORTS have spiked to new multi-day highs, and above 8100 would begin to advance back to former highs. this group has outperformed since our Feb lows, despite the minor backing and filling since mid-March- Overall, another index to watch carefully which is starting to suggest that the recent price action could still lead higher