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Small Caps Breaking out as Yields, USDJPY surge- Stocks have stalled

Little bit more than 40 mins remaining, US Equities have largely erased earlier losses, S&P up 11 ticks in past 4 hours with financials following Crude's move back over 45,and Energy gaining ground along with Utilities which are snapping back after recent weakness-  Only Technology remains lower by more than 1% with MSFT, GOOGL, FB, V all down more than 2%.  We've seen a very good move out of Small caps and Transports in recent days and IWM vs SPX has engineered a decent breakout which should help IWM LONGS vs the broader market. Additionally, we've witnessed a meaningful stabilization in the US Dollar in recent days, with outsized movement in USD vs Yen, but also rising vs Euro and Gold down around 1.4%  .  Overall, Gold and silver still look attractive to buy Yields have popped globally with German bund yield now at 23 bps, US TY TNX at 1.88.  Financials are the one sector along with Industrials and discretionary that has begun to reach former highs and could stall out into next week while Energy, Materials and Healthcare still seem very buyable .  Most of the attention remains on Crude, but nothing in the charts here suggests any reversal of any sort and still looks to move higher in the days ahead, technically.   SWN, NSC, RRC, ENDP, CHK, MUR, STI, STT , CHK alll up more than 5% today, with 6 of the top 10 performers all Energy based           

Relative charts using the Russell 2k vs SPX shows a trendline breakout above March peaks to the highest levels since early January.  Very much a constructive move which argues for Small cap outperformance in the days/weeks ahead- Favor IWM over SPY

DJ TRANSPORTS also holding up much better and charts of the DJ TRAN holding up near 8100 and likely to move to test and exceed Nov/Dec 2015 highs up to 8480

 

Natural gas closing at the highest since mid-February should allow for further upward progress with 2.25-.30 being possible after today's rise.  UNG at 7.29 has a chance to move up to near 8

 

Real Money article on Healthcare posted showing recent XLV breakout and progress in this sector

http://realmoney.thestreet.com/articles/04/22/2016/health-care-sector-feeling-better?cm_ven_int=homepage-latest-headlines