Please enable javascript in your browser to view this site!

Stocks up near Day's highs, Energy leading after Crude breakout

At mid-day, S&P continues to lift, now up nearly 0.80% with NASDAQ higher by more than 1%..  Small caps are outperforming while the rally is beginning to grow more broad-based intra-day, with Industrials and Healthcare now joining Materials and Energy in being up MORE than 1% on the day.  Breadth is a fairly strong 4/1 positive, with volume flowing at a nearly 4.5/1 ratio into Advancing vs Declining stocks.  The US Dollar has shown just mild declines today while Precious metals have pulled back a bit from earlier highs and WTI Crude's rally has largely managed to maintain early breakout gains above its 1-month pattern, and despite being a bit overdone, should be able to fuel Crude up to near 49-50, with an outside chance of 52-

Structurally, there were a few indications that markets might bottom out sometime this week, but today's strength is a bit more than what was expected given the ongoing downtrend from last week and from mid-April.  This does break a minor 4 trading day downtrend, but S&P will need to get above 2075 to exceed the entire pattern from mid-April that would make a lift back to new highs more likely, with a DAILY close over 2080 giving that confirmation structurally speaking.  See the updated Hourly chart below to see the S&P futures having gotten above 2058 for now, but still underneath 2075-80 area

Tough to make too much of this move, but more of a positive than having continued its decline.  Movement over this 2070-5 is the next step towards thinking markets could lift-  For now, there should be ample overhead supply between 2065-70

Crude a bit stretched intra-day, but a constructive technical breakout above areas that held since early May-  WTI remains a buy, and would look to buy dips when given the chance- Upside targets near 50, with an outside chance of 52

Consumer Discretionary remains a laggard, the worst performing sector over the last week and Retailing is a key reason why this has underperformed.  This daily chart of XRT v SPX shows this breakdown over the last two months, which on a relative basis, caused this to dip to the lowest level in 4 years time.  For now, it looks early to buy dips in Retailing (XRT) , and this lagging has caused an equally important breakdown vs the Consumer Staples sector.  For now, despite a nearly 1% rally in stocks, Discretionary and Staples are both only up about 0.40% and stocks like CMG, TWC, M, KORS, HOG, MAT are clear laggards, all down more than 1%