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Technology bounce underway, & Over 2862 is bullish for S&P

May 17, 2019

Mark Newton CMT, Newton Advisors, LLC

Contact: info@newtonadvisor.com



SPX Cash Index

Support: 2857-7, 2752-3, 2838-39, 2785-7

Resistance: 2891-3, 2898-2900, 2918



Thursday's Technical Analysis Video Webinar-5/16/19

https://youtu.be/RTMG17HRncc



My CNBC interview on GE General Electric Technicals- 5/8/19

https://www.cnbc.com/video/2019/05/08/ge-has-shown-momentum-but-may-have-rough-road-ahead-pro.html



My CNBC interview 5/8/19 discussing Technology

https://pub-origin.cnbc.com/video/2019/05/08/tech-sector-may-be-hitting-a-peak-technician-says.html





SPX - (3-5 Days)- Bullish- Buy early weakness- Prices exceeded 2862 in a broad-based rally yesterday on higher volume, breaking the downtrend and arguing for a bit more rally to close the week. Downside support of 2852 should now hold on pullback attempts. Targets should be 2918, then 2954



EuroSTOXX 50- Bullish - Above-avg gains have recouped over 60% of prior decline. Targets 3458, then 3514. Under 3311 is bearish.



HSCEI- Bearish-Minor bounce but has failed to make much progress, and Rising US Dollar could result in underperformance. Trend unlikely to exceed 11151 before turning down for a final pullack to this decline which could hit 10526 as maximum support before stabilizing and showing a stronger rally





Trading Longs: MNST, MHK, FLS, CMG, F, GM, GE, COST, TMUS, TNDM, COUP, LIQT, GRVY



Trading Shorts: EEM, M, SIG, LVS, EMR, DVN, NOV, AOS, OSTK

Prices managed to push above May's downtrend line resistance, in SPX, DJIA and NASDAQ Composite which was seen as a real positive on a day which finally managed to show some broad-based participation with 3 sectors up more than 1% on the day: Financials, Materials and Discretionary, while Industrials, Technology, Telecom and Staples all came very close. Breadth finished at a bit more than 2/1 positive, and while prices slipped a bit into the close, the net effect was still viewed as positive after indices looked to be near important levels. Unfortunately the news is not all bullish, as daily momentum remains negatively sloped and SPX still showed less than 50% of all stocks above their 50 and 200-day moving averages. Followthrough in the days ahead wiill be crucial to the success of a push to new highs with downside being limted to support near 2852. As stated above, under this would warn of a deeper retracement and possible test of lows.



Key developments for Thursday centered on the US Dollar pushing higher vs Yen and Pound Sterling while achieving a minor breakout vs the Euro. This looks to be important in causing underperformance in Emerging markets, specifically China, along with commodities in the days ahead. Meanwhile, Treasury yields look to have made an important "About-Face" the other day with yields on the 10yr getting down to near the key 2.33% before bouncing back above 2.39%. The net effect was a period of weakness for the Metals. While a move back above 2.50% would likely lead to further near-term pullbacks in Gold, for now Yields need to show much more technical improvement after being down the last 3 of four weeks.





ACTION PLAN- 



Long TBT with targets initially at 33.40 and breakout above leads to34.47, and then 36

Long GLD with target 125.90-Stop under 120.77


Long XLP with target at 58.90 and stops at 56.19




Additional charts and thoughts below.


S&P- Gains have broken 2862 which was seen as a positive in breaking the downtrend from early May. Breadth expanded on the move and volume picked up yesterday vs the prior session, both positives. At present, after 3 days of gains, S&P has managed to claw back over 50% of the decline thus far. Momentum hasn't turned up all that much thus far however, and remains negative based on popular gauges like MACD. Provided that S&P now stays over 2852, the swing high from earlier in the week, this trend will have a chance to follow-through. Seeing key groups like Financials and Healthcare participate in the days ahead would be a good sign.

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Semiconductors have been noticeably absent from the recent rally and have underperformed dramatically of late. After the steep selloff that broke uptrends from last December, we've seen just a fractional gain in the SOX. This is an important leading sector, and key part of Technology. Underperformance won't help to give much confidence in the Tech rally until SOX can regain the trendline that was broken. After hours earnings news saw NVDA gain nearly $10 from 160 to 170 in price before giving back all those gains during the conference call. Other stocks like AMAT were higher after hours, but it will be key to maintain these gains and try to jumpstart a rally in this sub-sector, which for now, remains a very big laggard.

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Emerging Markets likely face further selling pressure. As this daily chart of EEM shows, we've seen hardly any bounce in EEM after a 9.5% decline from early May. The lagging in performance was accentuated by Asian markets like China, Taiwan and Korea which have all plummeted lately, but others like Brazil have also broken down and shown real technical weakness. Overall, i expect EEM to pullback to test lows into next week and downward momentum could be strong enough to result in a retest of former lows.

Trend bearish but minor stabilization into close with hopes of Trade Deal

May 10, 2019

Mark Newton CMT, Newton Advisors, LLC

Contact: info@newtonadvisor.com



SPX Cash Index

Support: 2860-2, 2836-40, 2775-80

Resistance: 2898-2900, 2910-2, 2936, 2944-5



Link to Thursday 5/9 Technical Webinar-20 min overview on Selloff

https://youtu.be/rMoIsOVMKNI

My CNBC interview from yesterday, discussing Technology

https://pub-origin.cnbc.com/video/2019/05/08/tech-sector-may-be-hitting-a-peak-technician-says.html





SPX - (3-5 Days)- Bearish - Initial support at 2840 held yesterday within 2 ticks, and prices rallied nearly 25 handles into the close. Yet Downtrend is intact and momentum remains tilted lower. Failure to reach an agreement would send S&P down to 2775-95 in my view, and this is the key area to cover shorts. Above 2899 is bullish, and traders can use tight stops with 2880 as being a stop for shorts intra-day, and above 2899 on a close.



EuroSTOXX 50- Bearish - Acceleration has taken prices under the first Fibonacci and should hit 3283 within 4-6 trading days before a low of any magnitude. Overnight bounces on a US/China deal would need to clear 3425 to have likelihood of further gains



HSCEI- Mildly bearish-Trend has accelerated under support , but should stabilize at 50% retracement area. 10762 should provide a near-term floor and right to cover shorts here, thinking bounces would need to clear 11177 to have any real confidence.





Trading Longs: H, PRFT, ZS, TSCO, DISH, CME, FIS, CHD, SBAC, TMUS, SANM, MHK, BAC, C, V, IYT, KEX, ZTS, MYL, CAR, WIX, TSCO, MAS, TRP, FLT



Trading Shorts: BHGE, DVN, EOG, XEC, NOV, SLB, FOSL, WATT, AOS, MAT, SIG, CTXS, OSTK

BOTTOM LINE: The next 3-5 days is largely a coinflip, trends are bearish but are nearing areas where prices should bottom and begin to turn back up. Downside likely is limited to 2775 for S&P Futures while over 2899 jumpstarts the rally.



Overall, trends heading into next week largely will depend on the outcome of the US/China meeting and whether tariffs can be avoided. Given that this news did accompany many of the swings in recent days, taking a bet on the outcome would amount to largely a coin flip, though recent Trump dialogue and President Xi's letter seem to indicate the desire for a positive outcome. Note that breadth and momentum, along with Technology peaking out, however, along with Treasury yields, peaked out a full week ahead of much of the Trade tension drama. This truly set the stage, and the breakdown in Tech proved to be the catalyst.



Heading into end of week, technical trends from the 4/30 high remain bearish as of Thursday's close, though with an impressive rally to end the session which carried prices right up to important near-term resistance near the multi-day trendline. Key short-term resistance lies at 2880 while over 2899 on a close would be a signal to cover shorts and assume longs. The US has fared much better than the rest of the developed world as well as many Emerging markets which have been hit hard in recent weeks. EEM as a gauge for Emerging markets has dropped sharply, and while near-term oversold, remains difficult to bet on. Overall, for the bulls, it's a must to stabilize quickly with prices at multi-week lows and push back higher, as momentum has begun to drop off sharply. The next 24-48 hours should shed some light as to whether trends can snapback, or one final selloff is in order.



ACTION PLAN- 



Long XLP with target at 58.90 and stops at 56.50



Long XLF with targets at 28-28.50- Stops on daily closes under 26.90



Long IWM with targets at 162.50



XLU was stopped out and XLP and XLF are close. These will be kept on a tight leash, but thought to be good risk/rewards now for those not involved, with tight stops





Additional charts and thoughts below.

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S&P- Prices up near key downtrend, and a "MUST" to get over 2899 to have faith in this rally continuing. Early am lows occurred near 2838-40.This was thought to be a pivotal turning point for the day, and 2840 marked a key area of support that was based on both the 50% retracement from March-April rally as well as Gann 180 degree projections from the 4/30 high close of 2948.50.  While this held on Thursday, any failure in negotiations likely would take prices back down to recent lows, and the area of 5/15-7 stands out as being important for trend change, and on declines, should turn out to be a low. Overall, it's thought that this decline should be close to nearing a low, not something which could carry on through May. Yet, it's a must for Technology to stabilize quickly given its deterioration, something shown in charts below.

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S&P 500 Information Technology index- Bearish weekly drop to multi-week lows stands to confirm Demark sells barring a 1% rally Friday.

The drop to multi-week lows is a concern for Technology after the trend break for the group on daily charts, and this weekly chart also helps to put this deterioration into perspective. Prices rose right to prior highs and briefly above before reversing violently to new multi-week lows. Demark weekly TD Combo 13 sells could be confirmed on Friday's close, if Tech doesn't rally 1% higher in Friday's trading. This seems to be a bearish development, yet other sectors could come to Tech's rescue, as we've seen with Financials and Healthcare lately. For now, this past week looks to be a definite warning sign for Technology peaking, unless we can see an imminent rally back to highs.

highs.gif

Equity put/call ratio spiked intra-day right near late morning lows to the highest levels seen since December. This was important late morning on Thursday, as it happened right when S&P had neared the critical 2840 low. This sudden uptick in fear waned a bit towards the close with a 0.70 reading, yet eyeing the intra-day put/call trading can often be important, coinciding with hourly Demark signals, but those wishing to catch trading lows intra-day. Bottom line, while trends are bearish, prices look to be near support from a price and time perspective within the next 4-6 trading days, so it's right to use further weakness to consider covering shorts, particularlly when Equity put/call data confirms further.

Insufficient recovery, and Semis still weak within Technology

May 9, 2019

Mark Newton CMT, Newton Advisors, LLC

Contact: info@newtonadvisor.com



SPX Cash Index

Support: 2860-2, 2836-40, 2775-80

Resistance: 2898-2900, 2910-2, 2936, 2944-5



Thurs Technical Webinar, TODAY 1pm EST- Dial in info and link below:

https://join.startmeeting.com/info69336

Dial-In Number (United States): (701) 801-1211, Access Code: 840-955-999

My CNBC interview from yesterday, discussing Technology

https://pub-origin.cnbc.com/video/2019/05/08/tech-sector-may-be-hitting-a-peak-technician-says.html



Wednesday Technical Video, 5/8/19, discussing Selloff yesterday

https://youtu.be/9yBPZqj2Dsk



Thursday Technical Webinar link- 20-min overview of risk assets

https://youtu.be/aMjQydjqblo





SPX - (3-5 Days)- Bearish on break of 2901 Insufficient progress yesterday, and prices will need to get back up above 2909 to argue for gains. First real support lies at 2840 and below near 2775-2800 which should prove to be a buying opportunity.



EuroSTOXX 50- Bearish - No change- prices are hugging the lower Bollinger on Daily charts, any bounce likely should not get over 3475 before turning down to challenge March lows near 3281-3 which also hits the 38.2% FIbonacci retracement.



HSCEI- Mildly Bullish- Recent selloff creates a good risk/reward to buy weakness ahead of US/China talks. Selloff has reached good support to put in a trading low within 2-3 days. HSCEI managed to hold March/April lows and its right to use recent weakness to consider covering shorts. >11429 creates a more bullish short-term view.





Trading Longs: H, DISH, CME, FIS, CHD, SBAC, TMUS, SANM, MHK, BAC, C, V, IYT, KEX, ZTS, MYL, CAR, WIX, TSCO, MAS, TRP, FLT



Trading Shorts: BHGE, DVN, EOG, XEC, NOV, SLB, FOSL, WATT, AOS, MAT, SIG, CTXS, OSTK



Equity markets traded in a much narrower range yesterday, but insufficient upward progress to argue for any sort of meaningful low at hand ahead of this week's China negotiations. Trends remain bearish since last week, and there continues to be an exodus out of Technology, with yesterday's Semiconductor weakness a prime example. Overall, no meaningful progress in Equities to argue for a difference of opinion. Trends will be negative for US Stocks, with stops on S&P shorts near 2909 and movement under 2880 leading down to 2840, and a maximum of 2775-2800 into next week.



Utilities sold off sharply yesterday, in a rare showing of exodus out of Defensive sectors even with huge indecision about the course of the China trade deal. Rates have remained low, and no real evidence of Treasury yields turning higher. Thus, this group (as discussed below) has pulled back to near make-or-break territory and will need to stabilize.





ACTION PLAN- 



Long XLU with target at 61.50 and stops at 57.50 on a close



Long XLP with target at 58.90 and stops at 56.50



Long XLF with targets at 28-28.50- Stops on daily closes under 26.90



Long IWM with targets at 162.50





Additional charts and thoughts below.

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S&P- Bearish- No real change based on yesterday's price action. Trends from the last couple months remain broken technically and not sufficiently oversold to argue for any sort of real low. Yet, as we've learned in this news sensitive tape, any hint of progress on a meaningful deal likely would bring about a decent rally, and thus one should be prepared with 2909 as an area for stops. Hourly charts above show the stair-stepping price action of this decline as its unfolded in recent days. While the structure looks choppy and overlapping , there hasn't been sufficient progress to argue for buying dips particularly given a lack of news on this Trade deal. On the downside, 2840 looks like the first meaningful area on this pullback. Below that would likely bring about a test of 2775-2800, an area that coincides with the 50% retracement of the move from mid-February.

february.gif

Semiconductors weakened further Wednesday, dropping under the key 113.50 area (SMH) and breaking uptrend line support which happened to the Technology group as a whole in recent days. This leading sector violating trendline support is seen as a negative technically, and demonstrates that this group could witness further outflows and lag after turning in superb performance over the first four months of the year. With Technology higher by nearly 24% on the year, the last two weeks have shown a notable exodus out of this group, with losses greater than 2%. Overall, it's necessary to see some evidence of stabilization before trusting this group to bounce, but for now, a break of a multi-month trend normally argues for additional weakness.

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Utilities weakened down to key make-or-break support in recent days, an area marked by a support trendline undercutting the last few weeks lows that also marked resistance for former highs. Weekly closes back under 57 in XLU would argue for more meaningful weakness out of this group at a time when rates are still dropping. This might be viewed somewhat positively from a risk-on type standpoint, and signs of deterioration would be something to keep an eye out for given the recent weakness.

Trend break argues for additional weakness into next week

May 8, 2019

Mark Newton CMT, Newton Advisors, LLC

Contact: info@newtonadvisor.com



SPX Cash Index

Support: 2860-2, 2836-40, 2775-80

Resistance: 2898-2900, 2910-2, 2936, 2944-5



Will be on CNBC Trading Nation today 2:25pm EST along with CNBC Fast Money today at 5:20-5pm



Tuesday Technical Video, 5/7/19, discussing Selloff yesterday

https://stme.in/RPR9dzLv7H



Thursday Technical Webinar link- 20-min overview of risk assets

https://youtu.be/aMjQydjqblo





SPX - (3-5 Days)- Bearish on break of 2901 Trend gave way again and prices closed back under 2901, closing down at new 4 week lows. Technology broke down from its four-month uptrend, and is reason to think this decline extends in the short run. However, downside should be limited to 2775-2800 before stabilizing and bouncing



EuroSTOXX 50- Bearish given yesterday's close under 3425. While prices are hugging the lower Bollinger on Daily charts, any bounce likely should not get over 3475 before turning down to challenge March lows near 3281-3 which also hits the 38.2% FIbonacci retracement.





HSCEI- Mildly Bullish- Expect selloff has reached good support to put in a trading low within 2-3 days. HSCEI managed to hold March/April lows and its right to use recent weakness to consider covering shorts. Above 11429 creates a more bullish short-term view.





Trading Longs: FIS, CHD, SBAC, DRE, NEE, TMUS, SANM, MHK, BAC, C, V, IYT, KEX, ZTS, MYL, CAR, WIX, TSCO, MAS, TRP, FLT



Trading Shorts: BHGE, DVN, EOG, XEC, NOV, SLB, FOSL, WATT, AOS, MAT, SIG, CTXS, OSTK



Equity markets look to have finally broken down after a valid rebound attempt on Monday into the close. Prices violated meaningful intermediate-term uptrends yesterday in multiple indices domestically and abroad (SPX, DJIA, NDX, COMPQ, SX5E, SXXP, VALUA, NYA) which had been in place since late December. Volume expanded significantly on the break, with both Monday and Tuesday's totals for SPY reaching the highest levels in nearly two months. Breadth finished at a bit over 4/1 negative for NYSE, while volume surged into Declining vs Advancing issues. 9 of 11 sectors fell more than 1% while Industrials and Technology showed losses of more than 2% into the close. While oversold on hourly charts, which could allow for mild bounce, momentum looks to be clearly starting to turn lower in the very short run. This should turn out to be a near-term decline only and be one to buy into, given intermediate-term momentum, Advance/Decline near all-time highs, and attractive patterns in Financials, healthcare, Transportation stocks. Yet, in the short run, additional weakness looks possible into next week, with 5/16-7 being a key time for trend change.



Our recent top happened on 5/1, which happened to occur at a 45 degree time interval from our 3/21 minor high, 180 degrees from last November 7, 225 from our 9/21/2018 former all-time high, and 240 from 9/7. As many know, utilizing angles of the circle, when projected forward, based on the work of WD Gann, can often pinpoint areas for trend change. May 5, specifically lies halfway between the Spring and Fall Equinox and is always an area to watch carefully for reversals.



Overall, near-term weakness should have some support at 2840-3, right near the 50% retrace of the move up from March , but larger areas lie near 2787-2800 into mid-May. Outside of Equities, Treasuries have extended gains and yields down to 2.447 and a retest of 2.33 looking increasingly likely while German Bund yields look to test former lows from early April near -.10%. The yield curve has begun to flatten again, turning back down to 16.7 on 2/10s while the US Dollar has made fractional gains. Meanwhile, most Metals are down with the exception of Gold which looks to largely be a safety trade, along with gains in Japanese Yen, which has moved to 110.23 v USD. Crude oil fell down under 61.50 and while a low here seems close technically, one can't rule out a bit more weakness to undercut $60 which would bring about trend exhaustion into end of week (Supporting a bounce) Finally, it's worth pointing out that offshore Yuan is weakening again back to the prior days' lows, with USDCNH now at 6.80

While a Chinese deal might be right around the corner, uncertainty has begun to rise and Equity markets have begun to show more weakness, finally, some might say, after nearly a month of breadth deterioration. Going forward, it will pay to keep an eye on signs of HIGH TRIN readings (excessive volume in Down stocks vs UP) ,VIX inversion, and some evidence of other Fear.. Equity Put/call spiking or signs of exhaustion in VIX on absolute basis. 







ACTION PLAN- 



Long XLU with target at 61.50 and stops at 57.50 on a close



Long XLP with target at 58.90 and stops at 56.50



Long XLF with targets at 28-28.50- Stops on daily closes under 26.90



Long IWM with targets at 162.50





Additional charts and thoughts below.

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S&P- Bearish- Yesterday's decline extended under prior day's lows, turning trends bearish as prices fell to new multi-week lows, breaking a 2-month uptrend in the process. While near-term overdone on hourly charts, daily momentum is not oversold (RSI=42) and could extend further in the days/week ahead before any bottom. Overall, getting down to 2840 looks like the first meaningful area on this pullback. Below that would likely bring about a test of 2775-2800, an area that coincides with the 50% retracement of the move from mid-February.

february.gif

Technology fell to new multi-week lows yesterday and while still the top performing sector in YTD rankings, up 23.42%, the best performing sector by nearly 400 bps over the 2nd best, Consumer Discretionary, it's one of the worst over the last week, dropping 2.79%. This trendline break in Equal-weighted Technology looks important, and a meaningful trend violation after four months of gains. Additional relative weakness looks likely here in the short run, which at 20% of SPX, could put pressure on benchmark indices.

Treasury Yields (US 10YR Treasury Yield- TNX) Treasury yields have continued lower, with yields dropping below last week's highs, opening up the door for a rests of 2.33 near March lows. Yields peaked out about a week ahead of stocks, and now both have been trending lower the last few days. Most European yields are far weaker than US, so the drop in US yields and the 2/10 curve makes sense in recent days. OVerall, until yields can climb back above 2.60, it's right to be long Treasuries and/or ETFs like TLT, using minor dips to buy more.

Equities hold where they need to, now a strong rally is needed to avoid pullback

May 7, 2019

Mark Newton CMT, Newton Advisors, LLC

Contact: info@newtonadvisor.com



SPX Cash Index

Support: 2900-2, 2891-3, 2880

Resistance: 2944-5, 2953-5, 2970-5



Monday Technical Video, 5/6/19, discussing early Selloff yesterday

https://t.co/5awL1GRVR6



Thursday Technical Webinar link- 20-min overview of risk assets

https://youtu.be/aMjQydjqblo



CNBC interview, Wednesday, 5/1/19- Is Healthcare Bottoming?

https://www.youtube.com/watch?reload=9&v=20YklDG_jUo



Real Vision Interview: Healthcare- Monday 4/29/19

https://www.realvision.com/tv/videos/health-care-starting-to-bottom



Bloomberg Interview - Monday 4/29/19

https://www.bloomberg.com/news/videos/2019-04-29/oil-futures-are-headed-lower-between-now-and-september-mark-newton-says-video





SPX - (3-5 Days)- Bullish over 2901, thinking yesterday's weakness successfully held where it needed to on a close to help the trend avoid turning bearish. Daily closes under 2883 are needed to expect immediate downside. Until then, early morning weakness Tuesday very well could be buyable again and being over 2901 is a positive overall.



EuroSTOXX 50- Bullish over 3425, hedged under- Yesterday's decline looked bearish, yet the extent of the rally into the close failed to show much conviction for the bears. Movement back over 3514 paves the way for 3600.



HSCEI- Mildly Bullish- Expect selloff has reached good support to put in a trading low within 2-3 days. HSCEI managed to hold March/April lows and its right to use recent weakness to consider covering shorts. Above 11429 creates a more bullish short-term view.





Trading Longs: FIS, CHD, SBAC, DRE, NEE, TMUS, SANM, MHK, BAC, C, V, IYT, KEX, ZTS, MYL, CAR, WIX, TSCO, MAS, TRP, FLT



Trading Shorts: BHGE, DVN, EOG, XEC, NOV, SLB, FOSL, WATT, AOS, MAT, SIG, CTXS, OSTK



Equity markets in US and Europe have failed to decline enough to turn the trend bearish and despite the post market decline on Monday, again on tariff fears, prices have not gotten under the key 2901 area from last Thursday's lows to suggest selling is imminent.



The early selloff proved to be the lows of the day, right near the opening print and we saw very negative early breadth of near 10/1 improve steadily to near unchanged, just fractionally negative by the close. Sectors like Healthcare continued to make progress, while only the Materials sector lost more than 1% on the day. Energy managed to snapback but Technology showed losses of over -0.80%, so this sector continues to lag in the short run, and doesn't inspire confidence for Bulls.



Emerging markets bore the brunt of the selling in trading Monday, and many Chinese equity indices lost 5-8% in trading. While the Dollar has not made material progress in recent days, commodity related sectors have been hard hit lately. Meanwhile most of the "risk-off" type trades lost ground all day after gapping higher with USDJPY recovering along with Crude oil, while USDCNH gave up some of early gains. While markets could certainly face weakness if Monday's lows are breached, it's right to use early Tuesday weakness to buy until support is broken, in this case, 2901 initially for S&P on a close



Sectors like Financials, Industrials and also the Small-cap group remain in very good shape near-term, casting some doubt of the possible duration of any selloff. Yet many world indices seem to be at resistance and stalling out/reversing, so it will be worthwhile to pay close attention in the event prices get back to Monday's lows and breach these levels.





ACTION PLAN- 



Long XLU with target at 61.50 and stops at 57.50 on a close



Long XLP with target at 58.90 and stops at 56.50



Long XLF with targets at 28-28.50- Stops on daily closes under 26.90



Long IWM with targets at 162.50





Additional charts and thoughts below.

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S&P- Decline rose back up above last Thursday's lows, recapturning uptrend. Thus, it remains difficult to fade this market just yet, and even with after market weakness (S&P down 0.55% to 2916) markets have not broken down sufficiently to multi-week lows which might warn of further trend damage. Without any news whatsoever, prices rallied back Monday, and failed to show hardly any real deterioratoin by the close. Yet, the inability at this point to regain highs quickly will start to have a real downward tug on momentum, and could bring about a May decline. Even in this case, however, given the bullish price action in the Financials, Transport stocks, Healthcare and lack of any meaningful Tech weakness, selloffs likely prove short-lived.

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China nearing support at 50% retracement area- The pullback in China looks nearly complete as this has retraced nearly 50% of the whole rally from December over the last two weeks. While trade tension seems to be a factor that's affecting many markets, China bore the brunt of this in Monday's trading. Yet, most agree that a deal likely still has a higher probability than not, and tariff threats might still be a negotiation ploy. Technically the arae near 2900 should offer some support to recent weakness and this area also coincides with a likely TD Buy setup within the next 2-3 days. This strengthens the argument for a possible near-term bottom.

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Healthcare Services- XHS- This group remains one of the better risk/rewards within Healthcare and its mean reversion snapback is continuing to make progress. The Weekly Technical Perspective from mid-April had highlighted this group as a way to potentially participate in the mean reversion, and that looks to be really starting to shape up given recent strength and the breakout above this downtrend from February. Yesterday's strength occurred within a very weak overall market, and while Healthcare as a sector is starting to reach near-term resistance in XLV, the Healthcare Services group should be one to continue to overweight, expecting further strength. Look to be long and use minor weakness to buy for a move back to test prior highs.

Crude weakness growing more extreme as part of larger commodity meltdown

May 3, 2019

Mark Newton CMT, Newton Advisors, LLC

Contact: info@newtonadvisor.com



SPX Cash Index

Support: 2900-2, 2891-3, 2880

Resistance: 2944-5, 2953-5, 2970-5



Thursday Technical Webinar link- 20-min overview of risk assets

https://youtu.be/aMjQydjqblo



CNBC interview, Wednesday, 5/1/19- Is Healthcare Bottoming?

https://www.youtube.com/watch?reload=9&v=20YklDG_jUo



Real Vision Interview: Healthcare- Monday 4/29/19

https://www.realvision.com/tv/videos/health-care-starting-to-bottom



Bloomberg Interview - Monday 4/29/19

https://www.bloomberg.com/news/videos/2019-04-29/oil-futures-are-headed-lower-between-now-and-september-mark-newton-says-video





SPX - (3-5 Days)- Bullish -Insignificant weakness on Thursday to call for any kind of trend reversal. Yesterday's attempted follow-through failed to break meaningful support, with breadth only proving mildly negative. Long barring a close under 2891. Above 2950 likely drives to 3040-70



EuroSTOXX 50- Bullish- Some stalling out in the last few days, but requires a move UNDER 3425 to have a chance for any sort of real weakness. Movement back over 3514 paves the way for 3600.



HSCEI- Mildly Bearish- Movement higher in USD likely drives prices under 11467 which would lead down to 11167. Some stalling out lately and trends are still somewhat negative from a couple weeks ago. Movement back over 11865 needed for bullish stance.

Trading Longs: FIS, CHD, ED, D, SBAC, DRE, NEE, SEE, TMUS, SANM, MHK, BAC, C, V, IYT, LEN, KEX, ZTS, MYL, CAR, PCTY, WIX, TSCO, MAS, TRP, FLT, PCAR



Trading Shorts: BHGE, DVN, EOG, XEC, NOV, SLB, FOSL, WATT, AOS, MAT, SIG, CTXS, OSTK, EXPE



The late day rally kept trends from turning bearish yesterday, and it remains important to stay bullish until proper signs of weakness occur. For SPX, that lies near 2891 and with prices over that level, along with no discernible breakdown yet in Technology, it's right to stay positive, expecting that trends still haven't turned down.



Energy provided another meaningful day of weakness, as Crude's breakdown to multi-day lows resulted in severe weakness within the Energy sector. As noted from my Short list, many of the short are within the Energy sector, and this pullback in the group does not seem complete. WTI Crude looks to have a possible date with 58.50, so it's right to avoid buying dips too soon, as Crude remains in a seasonally weak time, and this cycle that turned down last week looks to be early to bottom.



Outside of Energy, Healthcare looks to be one bright spot to highlight and this group's bounce is still ongoing and looks to have further to go. Meanwhile, much of the attention remains on Treasury yields (which bounced sharply on Thursday, and the US Dollar which broke out, consolidated, and now is turning higher yet again. This looks to put some above-average pressure on Emerging markets and commodities, and it looks early to buy into most commodities and commodity related stocks that have turned down sharply.





ACTION PLAN- 



Long XLU with target at 61.50 and stops at 57.50 on a close



Long XLP with target at 58.90 and stops at 56.50



Long XLF with targets at 28-28.50- Stops on daily closes under 26.90



Long IWM with targets at 162.50





Additional charts and thoughts below.

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S&P- Still tough to fade this market, until S&P gets under 2891 in SPX cash. Yesterday's followthrough attempt on Wednesday's pullback initially breached trendline support, but by the close had rallied back to barely show much weakness and just fractionally negative. While momentum will begin to dip noticeably on this recent slowdown and downturn unless prices rally literally right away (and very well could be the start of a pullback) it's still important to have prices move down materially enough to argue for weakness. SPX could very well undergo a mild consolidation given the strength in Financials and lack of weakness in Tech and turn higher yet again, particularly given the recent participation in Healthcare.

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WTI Crude- Break to multi-week lows yesterday suggests additional weakness is likely before any bottom, and argues that Crude could be making a more meaningful decline. This represents the first material break of this trend from last December. Interestingly enough, Energy as a sector, which had not really followed Crude higher when it rose, has turned down very violently in recent days on this Crude weakness, breaking down sharply on both an absolute and relative basis. Also important to point out is that Crude and equities both bottomed on Christmas Eve on 12/24/18. Both moved up in tandem over the last few months and now Crude has broken support with Equities seemingly on the verge. For now, it's right to avoid Energy, and expect that additional weakness is likely.


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Commodities- Breakdown still looks to have further downside, and doesn't yet look complete. Given the recent breakout in the US Dollar, this meltdown in commodities over the last few weeks has been severe price-wise, breaking under the trend extending lower from prior highs as well as minor uptrends from prior lows. This puts commodities in a very weak place near-term, and given the upward near-term momentum in the US Dollar, it's likely that further weakness here occurs before any bottom. This area was thought to be a major source of strength this year, but will depend on the Dollar turning back down, which for now, looks premature.

Wednesday's Equity pullback failed to break key support

May 2, 2019

Mark Newton CMT, Newton Advisors, LLC

Contact: info@newtonadvisor.com



SPX Cash Index

Support: 2913-5, 2900-2, 2892-3

Resistance: 2944-5, 2953-5, 2970-5, 3000-7



Tuesday Technical Video 5/1/19 highlighting SPX, TNX, Transports

https://stme.in/0NFC0KoQ9R



CNBC interview, Wednesday, 5/1/19- Is Healthcare Bottoming?

https://www.youtube.com/watch?reload=9&v=20YklDG_jUo



Real Vision Interview: Healthcare- Monday 4/29/19

https://www.realvision.com/tv/videos/health-care-starting-to-bottom



Bloomberg Interview - Monday 4/29/19

https://www.bloomberg.com/news/videos/2019-04-29/oil-futures-are-headed-lower-between-now-and-september-mark-newton-says-video





SPX - (3-5 Days)- Bullish and still believe markets can move higher, with yesterday's pullback failing to break any meaningful support, with breadth only proving mildly negative. Long barring a close under 2891. Above 2950 likely drives to 3040-70



EuroSTOXX 50- Bullish- Recent strength paves the way for a move to 3600. Stops on longs at 3425



HSCEI- Mildly Bearish- No change- Movement under 11467 drives down to 11177- Choppy trend oer the last few months, but largely bearish in the latter half of April



Trading Longs: CHD, ED, D, SEE, TMUS, SANM, FIS, MHK, BAC, C, V, IYT, LEN, KEX, GDX, NEM, ZTS, MYL, CAR, PCTY, WIX, TSCO, MAS, TRP, FLT, PCAR



Trading Shorts: BHGE, NOV, SLB, FOSL, WATT, AOS, MAT, SIG, CTXS, OSTK, EXPE



The pullback yesterday failed to break support to think markets need to decline right away. Yesterday's weakness, interestingly enough, was largely in Energy, with Discretionary, Materials, Staples and Utilities all losing ground and dropping more than 1% on the day. Given recent strength in the Defensives, one could argue some backing and filling was necessary, but no meaningful weakness has happened and these are still more likely to recover and trade higher.



Breadth came in less than 2/1 negative, while trendline support from the last couple months remains very much intact. If and when we see a breakdown under this level, it will be right to think a near-term pullback has begun. If this is going to happen, it should happen over the next couple days given yesterday's reversal. Holding on here shifts the weight towards 5/16-8 before any top.



Post FOMC, we saw a mild rally in Indices, then a selloff, and price action got progressively worse during the day. Yields had taken the lead in turning down sharply, and even on the brief post FOMC meeting bounce, Financials were not participating, but then reacted even more negatively when the Yield curve turned down sharply. Overall, ,the burden of proof remains on the Bears to prove themselves after recent success.





ACTION PLAN- 



Long XLU with target at 61.50 and stops at 57.50 on a close



Long XLP with target at 58.90 and stops at 56.50



Long XLF with targets at 28-28.50- Stops on daily closes under 26.90



Long XLB with targets at 61 and stops on daily closes under 56.80



Long IWM with targets at 162.50





Additional charts and thoughts below.

S&P- Pullback failed to break support to expect any decline. Post FOMC, stock futures rallied initially, then tanked, but failed to violate the uptrend intact over the last couple months. To have any expectation of a larger decline, the area near 2900 has to be broken and ideally, 2891 which is stated below.

Financials- Near-term strength has brought Financials back to a key area where breakouts can happen. The existing downtrend for this group has lasted since last January's highs. Given the strength in the last few months, prices are now back to testing this key level. Movement above would be one to follow and chase, as it would represent the first real breakout for this group in over a year. Stay tuned.

tuned.gif

Healthcare- Bullish Seasonality getting underway-The last 5 years have seen above-average strength between May and July within Healthcare, with July proving the strongest. Each of these three months has averaged more than 1%. Thus, not only has Healthcare begun to stabilize and turn higher, but seasonality and also poltiical factors support this group.





Defensive strength likely to continue over next 2 weeks before stalling

May 1, 2019

Mark Newton CMT, Newton Advisors, LLC

Contact: info@newtonadvisor.com



SPX Cash Index

Support: 2926, 2916-8, 2900-2, 2892-3

Resistance: 2953-5, 2970-5, 3000-7



MondayTechnical Video 4/30/19 highlighting SPX, TNX, Transports

https://youtu.be/bKR39l8kmv0



Thursday Technical Webinar Link - 4/25/19

https://youtu.be/WMd1dvqN1Vg



Real Vision Interview: Healthcare- Monday 4/29/19

https://www.realvision.com/tv/videos/health-care-starting-to-bottom



Bloomberg Interview - Monday 4/29/19

https://www.bloomberg.com/news/videos/2019-04-29/oil-futures-are-headed-lower-between-now-and-september-mark-newton-says-video





I will be on CNBC Fast Money today 5/1 at 5;20-30 pm EST




SPX - (3-5 Days)- Bullish and yesterday's recovery should help indices make a final push higher above 3000 before a peak- Long barring a close under 2891. Above 2950 likely drives to 3040-70



EuroSTOXX 50- Bullish- Yesterdays' close cleared the 6 day range, paving the way for a move to 3600. Stops on longs at 3425



HSCEI- Mildly Bearish- Movement under 11467 drives down to 11177- Choppy trend oer the last few months, but largely bearish in the latter half of April



Trading Longs: CHD, ED, D, SEE, TMUS, SANM, FIS, MHK, BAC, C, V, IYT, LEN, KEX, GDX, NEM, ZTS, MYL, CAR, PCTY, WIX, TSCO, MAS, TRP, FLT, PCAR



Trading Shorts: BHGE, NOV, SLB, FOSL, WATT, AOS, MAT, SIG, CTXS, OSTK, EXPE



Some very interesting price action in recent weeks. Yesterday saw early weakness repelled with markets pushing back to near unchanged, but a very bullish move out of FInancials and Healthcare in recent days, which have led all other sectors over the last 5 days. Meanwhile, Technology has lagged a bit, given Semiconductor woes followed by yesterday's GOOGL and Samsung decline. AAPL earnings post market yesterday very well could help stocks extend gains further in trading on Wednesday, and despite some minor slowdown in Technology, we still haven't really seen that much of a dropoff.



Breadth came in only marginally positive yesterday and that's been a trend of late, along with momentum waning a bit. Yet even with stocks having pushed back to record highs, and overbought conditions prevalent with Exhaustion signals nearing completion again, it's tough to fight the tape, until proper evidence of weakness arises.



Key to note for Tuesday's trading: We've definitely begun to see some defensive trading take center stage, as Utilities, Staples and REITS all logged gains of more than 1% while Technology rose less than +0.25%. Absolute trends and relative have turned positive in the short run, though the intermediate-term have a bit of work to do before turning all that bullish.





ACTION PLAN- 



Long XLU with target at 61.50 and stops at 57.50 on a close



Long XLP with target at 58.90 and stops at 56.50



Long XLF with targets at 28-28.50- Stops on daily closes under 26.90



Long XLB with targets at 61 and stops on daily closes under 56.80



Long IWM with targets at 162.50



Long Copper for a move up to 308-310



Sold XOP- and sold IYT which was stopped out Monday



Additional charts and thoughts below.

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S&P- Snapback rebound bodes well for additional near-term gains- S&P fell in early trading Tuesday, yet failed to break the near-term uptrend and countertrend Demark-based sells are premature by at least 2-5 trading days. One should consider this recent breakout in Financials as being important for the market and while we've seen a defensive tone lately, there hasn't been any real deterioration in Technology sufficient to consider the market weak at this stage. The minor waning in breadth and momentum is something to pay attention to, yet not something to consider making one sell until price proves that it's time.

time.gif

Consumer Staples -Bullish near-term breakout- XLP has managed to engineer a very bullish short-term move back over prior highs, which can allow for some defensive gains in the short run, and a likely period of near-term outperformance to SPX and to Consumer Discretionary. XLP looks likely to rise to 59.50-60 and should be favored for gains into mid-to-late May before selling into this.

Utilities -Short-term Bullish- Intermediate-term look to sell into this move above 60 in XLU- XLU made a similar move yesterday, notching the highest close since mid-March and could help this group outperform in the very near-term over the next 2-3 weeks of May with targets up near 61-61.50. While the intermediate-term trend for Utilities shows prices stalling out at levels just above into mid-to-late May, the near-term suggests this area is one to favor technically and overweight, with stocks like ED, D, ETR, SRE, NEE, AEP, XEL are likely to outperform near-term as a result of yesterday's gains. These should be considered as longs for those with a 2-3 week timeframe looking for stocks which might outperform.

Financials follow Yield curve higher, while Oil falls, GOOGL drops after earnings whiff

April 30, 2019

Mark Newton CMT, Newton Advisors, LLC

Contact: info@newtonadvisor.com



SPX Cash Index 

Support: 2926, 2916-8, 2900-2, 2892-3

Resistance: 2953-5, 2970-5, 3000



FridayTechnical Video 4/24/19 highlighting SPX, TNX, Transports

https://stme.in/esq17g5u3r



Thursday Technical Webinar Link - 4/25/19

https://youtu.be/WMd1dvqN1Vg



My CNBC Interview on Disney and why shares are attractive 4/11/19

https://www.cnbc.com/2019/04/11/as-disney-prepares-to-unveil-disney-chart-suggests-break-of-a-four-year-rut.html





SPX - (3-5 Days)- Bullish barring a close under 2877. Upside target 2950- Above 2950 likely drives to 3040-70



EuroSTOXX 50- Bullish- Upside targets at 3600



HSCEI- Neutral- Some signs of stalling, but trend won't turn bearish until 11553 is violated



Trading Longs: BAC, C, V, IYT, LEN, KEX, GDX, NEM, ZTS, MYL, CAR, PCTY, WIX, TSCO, MAS, TRP, FLT, PCAR



Trading Shorts: PG, MAT, SIG, KR, GES, CTXS, OSTK, CI, MHK, WATT, EXPE



A few interesting developments as markets near the end of April. Financials have started to turn up in earnest, with the 2s/10s/ Yield curve breaking out to new steepening highs of the year. Small-caps have also performed well, with IWM breaking out above a fairly well defined base. Meanwhile, the Dollar's rally has thwarted some of the progress in the commodities space and Emerging markets while many of the Metals have turned up anyhow coinciding with the Treasury rally. Overall, in all likelihood, April will turn out to be a stellar month, with gains of more than 3%, marking the fourth straight months of gains, at a time when sentiment largely still hasn't totally embraced this rally.



Concerns of breadth deterioration, momentum waning a bit, and some violent sector rotation largely have had little to no effect in equities as of now. Demark exhaustion remains premature on daily and weekly charts. A few minor cycles hit near 5/1-2, but getting past this likely would result in further gains up to 5/16-7, which is an important area for trend change.



The concerns of recent Chinese deterioration along with Semiconductor weakness at a time when GOOGL looks to have whiffed on earnings, sending the stock down 3% after hours, while Samsung is showing weakness abroad this morning, could turn out to be problematic. Yet, these look to be largely counter-balanced by Healthcare strength and Small-cap relative strength. So for now a very strange and different market than that of January-March. Selectivity is key and it's thought that upside for S&P should be limited to near 3040-75, but yet at present, many are sounding a similar tune, and are skeptical that May can replicate what's been seen thus far this year . The movement in Financials and Tech should prove important, and for now both groups have been resilient of late.





ACTION PLAN- 



Long XOP with near-term targets at 34.50, stops under 31.75



Long IYT with targets at 209; Stops under 195



Long XLF with targets at 28-28.50- Stops on daily closes under 26.90



Long XLB with targets at 61 and stops on daily closes under 56.80



Long IWM with targets at 162.50



Long Copper for a move up to 308-310



Additional charts and thoughts below.

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Crude looks to be potentially peaking out as the uptrend from last December looks to be giving way. This should be watched carefully given that both Crude and Stocks both bottomed on Christmas Eve and now Crude is rolling over. Volatility based on OVX, the Crude Oil VIX, has turned up sharply all of a sudden after being cut in half since last November. Momentum has turned more bearish as well. Overall, near-term support might come in near 60 but rallies likely are to be faded and thinking that addiitonal losses could be in store. 

store.gif

China looks to be slowly but surely giving way at a time of Dollar strength and we've seen 6 of the last 7 days lower, which looks to pullback to test this uptrend from last year before any stabilization occurs. In the short run, the US Dollar breakout looks to have further upside, and it's likely that China's Shanghai Composite also weakens further, which might create some buying opportunities if this reaches 2900.

2900.gif

Alphabet ($GOOGL) (Google breakout failed to hold, and post market reversal could be important in providing a temporary Top. ) GOOGL had shown some decent technical strength into earnings, having risen more than 22% right near former highs. Monday's close actually got above the former highs from last July on a close, above 1285, but post earnings, has dipped back down below. Given that the option market had priced in a 3% move, the post market selling looks right in-line. If Monday's weakness cannot be recouped, this could have broader implications for Technology and produce a possible double-top for this stock. For now, this reversal looks isolated, but Tuesday's trading will be important to see whether Technology can shrug this off. Given last week's washout in Semiconductors, GOOGL decline very well might lead to additional Tech weakness.

Healthcare bounce underway, while Industrials lags on 3M miss

April 26, 2019

Mark Newton CMT, Newton Advisors, LLC

Contact: info@newtonadvisor.com



SPX Cash Index 

Support: 2916-8, 2900-2, 2891-2, 2873-4

Resistance: 2945-9, 2953-5



Thursday Technical Webinar Link - 4/25/19- 20 min Market Analysis

https://youtu.be/WMd1dvqN1Vg





My CNBC interview Thursday 4/25 on AMZN, MSFT, AAPL GOOGL and which i prefer

https://www.cnbc.com/video/2019/04/25/microsoft-and-three-other-stocks-close-in-on-4-trillion-in-market-cap.html





My CNBC Interview on Disney and why shares are attractive 4/11/19

https://www.cnbc.com/2019/04/11/as-disney-prepares-to-unveil-disney-chart-suggests-break-of-a-four-year-rut.html





SPX - (3-5 Days)- Bullish barring a close under 2873. Upside target 2945-50



EuroSTOXX 50- Bullish- Upside targets at 3600



HSCEI- Neutral- Some signs of stalling, but trend won't turn bearish until 11553 is violated



Trading Longs: IYT, LEN, LSTR, R, KEX, GDX, NEM, ZTS, VRTX, A, MYL, CAR, PCTY, HES, WHD, XOP, USO, WIX, TSCO, MAS, TRP, FLT, PCAR



Trading Shorts: PG, MAT, SIG, KR, GES, CTXS, OSTK, CI, MHK, WATT, EXPE



Consolidation was the theme for Thursday's trading, but just by a minor amount, but volume picked up for SPY to the highest we've seen in over 3 sessions and breadth was negative by roughly a 3/2 margin. Treasuries saw some backing and filling to prior day's gains, while the Dollar was largely unchanged. The key movement concerned gains back into Healthcare, which has been ongoing for the last few days, while Industrials suffered given big losses in MMM along with UPS and FDX

Given Technology strength, the rebound in Healthcare, and Transports breaking out (outside of Thursday's mild pullback) it still looks likely that SPX has a date with 2945-50 into next week. The period near 5/1-2 looks to have importance as a possible period for a turn, time-wise, but otherwise, we just haven't seen sufficient deterioration in SPX to warrant a bearish stance.



Demark signals have largely proven inconsistent with indices on daily charts, and new counts have begun, while the weekly counts are still very much premature by roughly 3 weeks, so no real exhaustion exists currently, and that window from early April ended up producing little to no real turn. It will pay to keep a close eye on Technology, and Financials with Yields having turned down. Specifically post market on Thursday, we saw a decline in the Chip stocks in after market trading post Intel's full year revenue forecast Cut. So stocks like NVDA, AMD and INTC could likely all still open up down to start trading Friday. However, until the SOX actually breaks support and we see real weakness in Equity index prices, most of this bad news hasn't had much effect on price.. yet. Stay tuned.







ACTION PLAN- 



Long XOP with near-term targets at 34.50, stops under 31.75



Long IYT with targets at 209; Stops under 195



Long XLF with targets at 28-28.50- Stops on daily closes under 26.90



Long XLB with targets at 61 and stops on daily closes under 56.80



Long IWM with targets at 162.50



Long Copper for a move up to 308-310



Additional charts and thoughts below.

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SPX still looks to push higher as pullback attempts have proven futile and short-lived intra-day. Tuesday's gains proved to be the biggest of the week thus far in what otherwise has amounted to very tight range-bound trading for the SPX which largely began in early April. Overall, movement down under 2891 on a close would arouse suspicion, and then 2873 is important also as support. Barring any movement under these levels, minor intra-day weakness should be buyable and closes over 2936 should have 10-15 points of upside near-term. 


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Healthcare bounce underway. The rebound this week in Healthcare was something we discussed on yesterday's Webinar call (link above) and is considered a mean reversion bounce after a huge period of underperformance over the prior couple months. (This of course followed very GOOD performance last year, so we saw classic mean reversion also to start 2019 with the top performing sector like Healthcare being sold to start the year.) This oversold bounce has key resistance near 89.80 or about $1.50 higher. Over that level would allow for a larger rally to commence for Healthcare, which fits nicely into a seasonal period of strength for this group. Pharmaceutical stocks look particularly attractive to own for gains and any slowdown in the broader market rally normally turns attention towards this more defensive part of Healthcare for outperformance.


outperfoRMANCE.gif

Industrials pullback should be nearing support within 1-2 days. While this sector was the market's biggest decliner on Thursday, with outsized losses out of MMM, UPS, ROK, MAS, WAB, each falling more than 6%, both absolute charts of XLI along with relative charts of the Equal-weighted Industrials complex (SPXEWIN index-Bloomberg) vs SPX look to be near support. We had covered the Transports in prior emails discussing how this was a positive move and likely to carry Industrials higher. Yesterday's reversal in the group thus far looks likely to prove short lived for now, with MMM and UPS both near key levels after big declines on Thursday. However, it's worth watching relative charts of Industrials if in fact this starts to breakdown vs SPX and violate this ongoing uptrend. That would be a possible sign of further deterioration that could hurt the broader market.

US Treasury yields plummet to follow Europe, while Dollar breakout hurts Emerging markets

April 25, 2019

Mark Newton CMT, Newton Advisors, LLC

Contact: info@newtonadvisor.com



SPX Cash Index 

Support: 2926, 2916-8, 2900-2, 2892-3

Resistance: 2945-9, 2953-5, 2970-5, 3000



Thursday Technical Webinar happens today at 1pm EST-Click below at the start & Dial In

https://join.startmeeting.com/info69336

Dial-In Number (United States): (701) 801-1211, Access Code: 840-955-999





Wednesday Technical Video 4/24/19 highlighting SPX, TNX, Transports

https://youtu.be/sTkgO1Maruc



Thursday Technical Webinar Link - 4/11/19

https://youtu.be/Cn1P4hiKm-M



My CNBC Interview on Disney and why shares are attractive 4/11/19

https://www.cnbc.com/2019/04/11/as-disney-prepares-to-unveil-disney-chart-suggests-break-of-a-four-year-rut.html





SPX - (3-5 Days)- Bullish barring a close under 2877. Upside target 2945-50



EuroSTOXX 50- Bullish- Upside targets at 3600



HSCEI- Neutral- Some signs of stalling, but trend won't turn bearish until 11553 is violated



Trading Longs: IYT, LEN, LSTR, R, KEX, GDX, NEM, ZTS, VRTX, A, MYL, CAR, PCTY, HES, WHD, XOP, USO, WIX, TSCO, MAS, TRP, FLT, PCAR



Trading Shorts: PG, MAT, SIG, KR, GES, CTXS, OSTK, CI, MHK, WATT, EXPE



Key developments for yesterday centered on three things: The Treasury breakout around all parts of the curve, the big outperformance in Transportation stocks, and the lagging in most Emerging markets as the Dollar breakout from early in the week extended. S&P showed just fractional losses, but failed to give back even 1/2 of the prior day's advance, and most stocks rose in trading than declined. Thus, tough to make anything of yesterday as being all that meaningful with regards to Equities. 



However, just three sectors rose in trading (Staples, Utilities, and REITS) and there was more volume into the Declining issues than advancing. Heading into the balance of the week, one can't put too much stock in markets turning down into end of month until/unless S&P manages to pullback and erase the early week advance and undercuts 2896 at a minimum (Last Friday's lows), though getting under 2873 in SPX cash would be a much bigger deal. On the upside, it's thought that movement up to 2945-50 should cause prices to stall and potentially reverse starting near key cycle dates of May 1-2. For now, it looks right to follow the move in Transports, but also keep a close eye on the Dollar (which has broken out higher) and Treasury yields, which took a big leg down yesterday. These seemed to be the most important developments to focus on. Charts below will help to put some of this movement into perspective. .





ACTION PLAN- 



Long XOP with near-term targets at 34.50, stops under 31.75



Long IYT with targets at 209; Stops under 195



Long XLF with targets at 28-28.50- Stops on daily closes under 26.90



Long XLB with targets at 61 and stops on daily closes under 56.80



Long IWM with targets at 162.50



Long Copper for a move up to 308-310



Additional charts and thoughts below.

below.gif

Transport stocks remain attractive to own here at this stage of the rally. Yesterday saw this group demonstrate further signs of outperformance, and charts of the DJ Transportation Average have now begun a quicker ascent after the last month of churning near former highs. Airline stocks continue to largely be laggards on this move, but the Rails, Trucking, Air Freight should be favored. Stocks like R, LSTR, CAR, KEX all showed solid outperformance in yesterday's trading and could be considered as technical overweights for further relative strength during this move.

move.gif

Emerging Markets ETF -EEM- Look to buy this first dip- EEM has a decidedly downward bias over the last few trading days, and much of this looks to coincide with the recent breakout in the US Dollar which has resulted in underperformance for most Emerging markets this week. Yet it's right to think this area near 43.50 might hold as support given the ongoing uptrend. This looks to be the first real area of support for EEM on this pullback within the uptrend. Thus, an attractive risk/reward for dip buyers while any move under 43.25 would warn of a likely pullback down to $42 before any real bounce.ç

bounce.gif

Treasury Yield pullback looks to accelerate. The decline in Treasury yields looked to be the most important technical development for yesterday, with US 10-year Yields slicing back down under important trendline support that had held for the last couple months. Specifically, the move under 2.547 should result in a test of 2.45 but one can't rule out 2.40 before yields start to stabilize. It's thought that the inability of yields to trade above 2.60% for more than 1 day didn't represent as bullish of a move in rates as what was thought initially, and as daily charts show, yields stalled out near prior levels of yields lows that were thought to be important as resistance. Overall, this could be an important development that eventually leads stocks lower, as what has happened in the past, and one should keep a close eye on Rates, which for now, look to be heading back lower.

Crude oil breakout bullish near-term, but Energy stocks have largely not followed suit all year

April 23, 2019

Mark Newton CMT, Newton Advisors, LLC

Contact: info@newtonadvisor.com



SPX Cash Index

Support: 2900-2, 2892-3, 2872-7

Resistance: 2915-7, 2923-5, 2945-9



Monday Technical Video 4/22/19 highlighting SPX, Oil, VNQ

https://youtu.be/jUWq0Kw2mAo



Thursday Technical Webinar Link - 4/11/19

https://youtu.be/Cn1P4hiKm-M



My CNBC Interview on Disney and why shares are attractive 4/11/19

https://www.cnbc.com/2019/04/11/as-disney-prepares-to-unveil-disney-chart-suggests-break-of-a-four-year-rut.html





SPX - (3-5 Days)- Bullish barring a close under 2877. Upside target 2945-50



EuroSTOXX 50- Bullish- Upside targets at 3600



HSCEI- Neutral- Some signs of stalling, but trend won't turn bearish until 11553 is violated



Trading Longs: HES, WHD, XOP, USO, WIX, PEP, KO, TSCO, MAS, TRP, QSR, THD, FLT, PCAR

Trading Shorts: VNQ, SIG, KR, GES, CTXS, OSTK, CI, MHK, WATT, EXPE



Equities have been sideways now for the last 4-5 days, showing little to no progress in SPX, as this index along with NASDAQ Composite and the DJIA have not yet joined the NASDAQ 100 back at new high territory. Yesterday's main technical development concerned the breakout in WTI Crude oil which looks to help Crude make further progress. Energy stocks responded and were Monday's best performing sector and look likely to benefit a bit more from this Crude surge in the near-term. However, this sector has performed largely in-line with SPX, higher by 19.57% and Energy as a group has underperformed other sectors like Technology, Industrials, Discretionary, and Communication Services. While Exploration and Production stocks look attractive, others within Oil Services and Integrated oils have underperformed dramatically, making selectivity important.



Meanwhile, REITS took another leg down, and IYR, VNQ underperformed as STIC, RLGY, RHP, CLNY, WRI, SKT, MAC, REG, KIM were all down 2.5% or more. This latter group still looks likely to weaken further in the days and weeks ahead, and investors should hold off from trying to buy dips.



Overall, a more difficult tape near-term with a few signs in the last week of short-term breadth having dropped off a bit, and groups like Healthcare are primarily responsible, proving to be a definite drag on broader market performance given their 13.3% weighting in the SPX. However, until there is evidence of SPX dropping down under 2877 on a close, markets still have the chance of pushing higher, and some type of proof of weakness will be necessary to avoid.







ACTION PLAN- 



Long XOP with near-term targets at 34.50, stops under 31.75



Long XLF with targets at 28-28.50- Stops on daily closes under 26.90



Long XLB with targets at 61 and stops on daily closes under 56.80



Short IWM for a move down to 151 from 155.2- Stops above 157.4



Long Copper for a move up to 308-310



Additional charts and thoughts below.

below.gif

S&P's plodding along continues, which has been a source of frustration for both bulls and bears alike. For those newly involved, S&P has not yet broken out to new highs such as what's happened to the NDX. The hourly pattern here remains choppy and despite being upward sloping, a break down under last week's lows of 2889 in S&P Futures or 2893 would likely prove negative to Equities in the near-term. We'll use 2877 as being the key area to stop out trading longs, while movement back above 2915.75 should allow for a final push up to 2945-50 area, where this should stall out into early May. For now, insufficient reasons from a price standpoint to be too negative, but some upward acceleration here in both prices and breadth/momentum would be a source of comfort to bulls, as markets have been churning with no change of trend for the last 4-5 trading days.

days.gif

Energy has begun to show a few signs of life in the last couple weeks, but it was Crude's breakout of the 8 day range in both WTI and Brent which helped XOP on Monday. This Exploration and Production ETF looks likely to follow through higher up to 34.50 in the short run. Energy has not really shown much outperformance to the broader market despite Crude's sharp rally in recent months. However, with regards to XOP, this does seem likely to gain some momentum after the technical breakout of this base which had been in place since January of this year. A breakout of this consolidation range should bode well for some strength out of XOP, and this ETF is favored over both OIH and XLE for outperformance within Energy.

energy.gif

REITS have begun to trend down very sharply in recent days and further underperformance out of this group looks likely. The VNQ, the Vanguard Real Estate ETF, when plotted vs SPX, has broken down under the lows of this triangle pattern it had formed back in December 2018. While stretched after the last couple days of losses, no evidence of this bottoming here is in place. Thus, additional pullbacks and underperformance for the group as a whole is expected in the days/weeks ahead.





Happy Good Friday- Europe showing very good recovery-

April 19, 2019

Mark Newton CMT, Newton Advisors, LLC

Contact: info@newtonadvisor.com



SPX Cash Index

Support: 2900-2, 2892-3, 2872-7

Resistance: 2915-7, 2923-5, 2945-9



Note : No regular report today given Good Friday holiday for NYSE, so I wanted to show a few charts of Europe and Dollar that were encouraging. Have a good holiday weekend for those celebrating, and we'll resume next Monday morning with the weekly report



Thursday Technical Webinar Link - 4/11/19

https://youtu.be/Cn1P4hiKm-M



My CNBC Interview on Disney and why shares are attractive 4/11/19

https://www.cnbc.com/2019/04/11/as-disney-prepares-to-unveil-disney-chart-suggests-break-of-a-four-year-rut.html



Bloomberg Interview Monday 4/8- Natural Gas turning higher

https://www.msn.com/en-gb/finance/video/buy-calls-on-natural-gas-mark-newton-says/vi-BBVJIZX





SPX - (3-5 Days)- Bullish barring a break of 2900- Gradual waning, which is largely Healthcare related, but Tech, Financials and Industrials are all still positive and ETF's of these sectors have moved to new highs for 2019 and in the case for XLK and XLY, new all-time highs. Above 2915 is bullish for a move up to 2945-9. Under 2877 important for the bear case.



EuroSTOXX 50- Bullish- Europe has been stronger than SPX lately and move up to 3600 likely



HSCEI- Bullish- Movement back to the highs now looks to result in further strength near-term and right to be long and buy minor dips. Under 11423 is negative for further weakness



Trading Longs: WIX, HRS, PEP, KO, TSCO, TEAM, FCX, LYB, CMCSA, MAS, TRP, QSR, THD, DHR, XOP, USO, FLT, PCAR



Trading Shorts: SIG, KR, GES, CTXS, OSTK, CI, MHK, WATT, EXPE

Looking back at last week, we saw some promising developments with XLY, XLK pushing back to new high territory while XLI moved back to new 2019 highs. The NASDAQ 100 actually pushed up and made a new all-time closing high while DJIA, CCMP & SPX are promising in this regard that new highs can likely happen sometime this year. Healthcare has been the big laggard in recent weeks, showing a rather capitulatory decline and indeed important at 13.3% the second largest sector for SPX. For now though, the strength in sectors like Industrials and Financials have helped to bail out Technology, which itself has not been all that weak of late. Overall, insufficient weakness this past week to be all that negative heading into late April from a price perspective, but sentiment is sounding a clear warning now in getting very optimistic and something to watch carefully.



Looking abroad, Europe has rebounded in a very strong fashion in recent days, with DAX recovering its damaging technical position, while indices like SXXP and SX5E have both made promising near-term breakouts. As discussed in recent reports, the monthly momentum breakdown globally will be problematic this coming Fall and into next year. However, near-term, the strength of this comeback since December 2018 has been remarkable and something which for now has been a rally unable to fade, outside of picking spots to try to sell into (which I've tried a couple times in recent months)



Outside of equities, the commodities rally has proven difficult to trust given the US Dollar strength, which managed to build last week (and will be highlighted briefly below) Meanwhile, Treasury yields attempted a brief bounce last week, but yet held exactly where they needed to (on US 10YR ) before softening on Wed/Thursday. The Yield curve meanwhile has shown little to no real evidence of breaking the neutral consolidation that has been in place most of this year.



I'll list a couple European indices with brief comments and then the US Dollar chart which is growing increasingly stronger in recent days. Have a nice holiday weekend, and my technical coverage will resume with the Weekly Technical Perspective on Monday morning.





ACTION PLAN- 



Long XLF with targets at 28-28.50



Long XLB with targets at 61 and stops on daily closes under 56.80



Short IWM for a move down to 151 from 155.2- Stops above 157.4



Long Copper for a move up to 308-310



Additional charts and thoughts below.

below.gif

SX5E, the STOXX50, is important to highlight given that Europe has moved up at a slightly quicker rate than US lately. Its breakout a couple months ago of the larger downtrend was seen as constructive, technically, and after a few weeks of consolidation, started to turn back higher sharply. Near-term this remains quite bullish with not much resistance until near 3600. Therefore, this remains a tough index to fade on gains right now, and Europe, similar to the US, is still quite bullish technically, with little to no real technical damage since it bottomed last December.

decemb.gif

The DAX, or German Boerse, has made remarkable progress lately in getting back up above not only former lows like the SPX and other US indices have, but also in now exceeding the larger downtrend from the highs made in early 2018. This is a very positive near-term development. So, despite being near-term overbought, the pattern has gotten structurally better for DAX technically and should be able to carry this higher to 12750-13000 without too much trouble.

trouble.gif

The Dollar should be on the verge of a larger move given the constricted trading in recent months, and given the downward bias of the 8 year cycle from 2016 highs, i had thought this would start to trend lower. Well the near-term technicals have actually been quite bullish for USD lately, so it's important not to get too negative too soon and let this move play out. Any rally above March highs that takes out this intermediate-term trend will let this pattern push higher into the Summer, which could be near-term damaging for EM , China and commodities before a larger bottom.

Healthcare showing capitulatory decline, while Transports partially offset

April 18, 2019

Mark Newton CMT, Newton Advisors, LLC

Contact: info@newtonadvisor.com



SPX Cash Index

Support: 2900-2, 2892-3, 2872-7

Resistance: 2915-7, 2923-5, 2945-9



Note : No Weekly call or daily videos this week, as I am travelling out of the country. Normal service will resume next week. Thanks for your understanding.



Thursday Technical Webinar Link - 4/11/19

https://youtu.be/Cn1P4hiKm-M



My CNBC Interview on Disney and why shares are attractive 4/11/19

https://www.cnbc.com/2019/04/11/as-disney-prepares-to-unveil-disney-chart-suggests-break-of-a-four-year-rut.html



Bloomberg Interview Monday 4/8- Natural Gas turning higher

https://www.msn.com/en-gb/finance/video/buy-calls-on-natural-gas-mark-newton-says/vi-BBVJIZX





SPX - (3-5 Days)- Bullish barring a break of 2900- Gradual waning, which is largely Healthcare related, but Tech, Financials and Industrials are all still positive and ETF's of these sectors have moved to new highs for 2019 and in the case for XLK and XLY, new all-time highs. Above 2915 is bullish for a move up to 2945-9. Under 2877 important for the bear case.



EuroSTOXX 50- Bullish- Europe has been stronger than SPX lately and move up to 3600 likely



HSCEI- Bullish- Movement back to the highs now looks to result in further strength near-term and right to be long and buy minor dips. Under 11423 is negative for further weakness



Trading Longs: WIX, HRS, PEP, KO, TSCO, TEAM, FCX, LYB, CMCSA, MAS, TRP, QSR, THD, DHR, XOP, USO, FLT, PCAR



Trading Shorts: SIG, KR, GES, CTXS, OSTK, CI, MHK, WATT, EXPE

The two big themes for yesterday's trading revolved around both the ongoing decline in Healthcare, which began to exhibit capitulatory type selling, as well as the advance in Transports, which partially offset, but enough to keep indices largely unchanged, with just small losses by the close. Rails helped Transports as well as Industrials (shown below) which have moved to new highs for the year.



Healthcare accounts for over 13.3% of the SPX, so certainly important as the second largest sector behind Technology. The breakdown in stocks like ALXN, DVA, VRTX, EW, REGN, ISRG, NKTR has been extreme, and each of these stocks was down more than 6% on Wednesday alone. Charts on XLV (shown below) looks to be in a capitulatory type decline and still early for any type of meaningful bottom. Any bounce Thursday/Friday should still be a selling opportunity for a bit more weakness into early next week.



Overall, it's important to note that the 3 big sectors which had accounted for most of the performance thus far this year, Technology, Industirals and Discretionary, have now all moved up above former highs, with Tech and Discretionary moving back to new all-time highs, while Industrials has hit new highs for 2019. These are all temporary positive developments. Upon closer look, the long-term momentum decline has certainly weighed on these sectors, and we'll dig into this a bit deeper in the weekly piece next Monday morning. For now, seeing some type of stabilization in Healthcare will be important for the market, but Tech , Industrials and Financials are perfectly able to carry prices higher near-term a bit longer.





ACTION PLAN- 



Long XLF with targets at 28-28.50



Long XLB with targets at 61 and stops on daily closes under 56.80



Short IWM for a move down to 151 from 155.2- Stops above 157.4



Long Copper for a move up to 308-310



Additional charts and thoughts below.

Industrials have managed to power higher over both prior highs thought to be important. Rails have been primarily responsible, but definitely a very bullish move that argues for further gains in the days/weeks ahead with targets near last Fall's highs. Industrials have now moved back to new highs for the year, while both XLK and XLY have moved to new all-time highs. While momentum has certainly not followed on a long-term basis given the extent of 4Q deterioration, this is a short-term positive. Stocks like UNP, CSX, NSC, KSU have all shown excellent near-term structure and moved higher.

higher.gif

Healthcare, as seen by the SPDR ETF, XLV, broke down exactly opposite of what most symmetrical triangles following lengthy uptrends produce. In this case, a violation of the lower level, which has led to rapid acceleration lower in the last couple days. Given the momentum of this move, it's difficult to call for a bottom here, despite prices reaching oversold territory quickly. Bounces could still represent selling opportunities into next week before any bottom is at hand. Any decline down to 82-83 should represent an excellent risk/reward opportunity to buy dips.

dips.gif

Copper is showing some real strength at the time as Treasury yields have also begun to pop. While this "forward looking" economic gauge has been strengthening, most economic data continues to miss expectations. Near-term though, this move is a positive for Copper and should drive the metal higher up to 308-310.

Dollar & Yields turning down beneficial for Commodities

April 11, 2019

Mark Newton CMT, Newton Advisors, LLC

Contact: info@newtonadvisor.com



SPX Cash Index

Support: 2877-80, 2870, 2861, 2848-9

Resistance: 2902-4, 2908-10, 2915-7



Thursday Webinar today will take place at 11 am EST- Unfortunately i will not be able to do this at 1pm today, so we're scheduling this earlier. Apologies if that doesn't work, but i will have a link that i will post afterwards to the Blog at http://newtonadvisor.com/blog and to YouTube on my channel. See me for details if you cannot locate.





Wednesday Technical Video- 4/10/19

https://stme.in/W8Cskiwxwf



Bloomberg Interview Monday 4/8- Natural Gas turning higher

https://www.msn.com/en-gb/finance/video/buy-calls-on-natural-gas-mark-newton-says/vi-BBVJIZX



Webinar Link from last Thursday's Technical Call- 4/4/19

https://youtu.be/kvOxFMEciAw





SPX - (3-5 Days)- Bearish- Reversal failed to lead to followthrough yet, but prices now back up to former highs near 2890 and should make it hard to push higher. Resistance at 2900-5 while Stocks likely begin 3-5 day pullback. Maximum weakness down to 2785-2800 in all likelihood.



EuroSTOXX 50- Bearish- Similar to SPX, SX5E has reached areas where it makes sense to lighten up and/or fade this rally. Longs have stops under 3400 and likely max upside to 3500 this week



HSCEI- Rally likely nearing its end; Expect peak Wed/Thurs to follow US/Europe lower near-term Resistance-11895-12000



Trading Longs: IAU, GLD, GDX, UNG, DBC, FCX, LYB, DWDP, CMCSA, MAS, TRP, QSR, TSCO, HD, DHR, XOP, USO, FLT, PCAR



Trading Shorts: SIG, KR, GES, CME, CBOE, MO, OI, LB, TWLO, TEAM, CTXS, OSTK, CI, MHK, WATT, EXPE



Early losses failed to hold, and prices wound up back near prior highs, with little to no damage having been done. Is this the end of the correction? We'll see.. as of now, we still have 3 very important sectors right up at resistance, while breadth and momentum have dropped off sharply. While Technology managed to lead in trading, and was the only sector along with REITS up more than 0.50%. As discussed, S&P prices are now back up to prior highs though with far less momentum and the area at 2895-2905 (if what im thinking is correct) should still be important as resistance and hold prices. ON the other hand, it's always good to know where one's wrong, and if XLY, XLI and XLK all manage to get through prior highs with little to no problems, than the rally might be able to persist a bit longer. After all, the uptrend for SPX, DJIA and NASDAQ had NOT been broken yet, but only with IWM along with some concerning problems with breadth and momentum in the very short term. So it seemed like a good spot to take a stab given some of the warning signs previously discussed, and this largely has not changed with Wednesday's trading. After nearly 3 months of being bullish, it's all about picking spots, and this continues to look appealing to me technically as a place to lighten up for at least a minor move.



Outside of equities, the real action occurred in the US Dollar and Treasury yields which both fell sharply, helping to boost commodities. Given that both fell to new multi-day lows, the decline looks to continue, and should result in CCI index breaking out to new monthly highs and Precious metals to show some real outperformance.





ACTION PLAN- 



Long GLD for a rally up to 127- Stops under 120.96



Long UNG for a rise in Natural Gas into end of April/early May with targets at 2.90-2



Long XLB with targets at 61 and stops on daily closes under 56.80



Short IWM for a move down to 151 from 155.2- Stops above 157.4



Short XLK with targets at 72.25



Short XLY with targets at 114.50







Additional charts and thoughts below.

below.png

SPX managed to push back to the highs of the last couple days, though momentum remains well off highs and as seen in RSI on hourly charts, has steadily moved lower. While a move to 2900-5 can't be ruled out, this still looks like an appealing area to take off risk, not bet on further upside. The key area to breach to have more confidence lies near 2877-8. Under those lows gives some more confidence of a peak in place that should allow for at least 3-5 days of downside.

CCI, the Equal-weighted Thomson Reuters Commodity index, has pushed back up to recent highs, and looks likely to result in this pushing higher in the days and weeks ahead. Given that both the US Dollar and Yields are declining, this should prove beneficial for commodities.

commodities.png

Chinese stocks could weaken near-term, and it's right for those short-term focused to consider taking profits and holding off from initiating new longs here right away after this recent rally. Overall the China Large-Cap ETF, FXI, looks bearish near-term given its recent reversal and further near-term weakness looks likely before this can start moving higher again. In recent days, FXI rolled over in recent days to get back below the area of the prior breakout. This close at multi-day lows likely results in FXI puling back under 45 in the days ahead , which could offer a better risk/reward opportunity on the long side. While the intermediate-term rally is very much intact, the near-term has stalled and might allow for some near-term weakness before this can turn back higher.

Gold looks to be turning higher, while Stocks take a breather, right on cue

April 10, 2019

Mark Newton CMT, Newton Advisors, LLC

Contact: info@newtonadvisor.com



SPX Cash Index

Support: 2880, 2870, 2861, 2848-9

Resistance: 2902-4, 2908-10, 2915-7

Tuesday Technical Video- 4/9/19

https://youtu.be/3zgBL98_7tQ



Bloomberg Interview Monday 4/8- Natural Gas turning higher

https://www.msn.com/en-gb/finance/video/buy-calls-on-natural-gas-mark-newton-says/vi-BBVJIZX



Webinar Link from last Thursday's Technical Call- 4/4/19

https://youtu.be/kvOxFMEciAw




SPX - (3-5 Days)- Bearish- Reversal happened on cue- Stocks likely begin 3-5 day pullback. Maximum weakness down to 2785-2800 in all likelihood.

EuroSTOXX 50- Bearish- Similar to SPX, SX5E has reached areas where it makes sense to lighten up and/or fade this rally. Longs have stops under 3400 and likely max upside to 3500 this week

HSCEI- Rally likely nearing its end; Expect peak Wed/Thurs to follow US/Europe lower near-term Resistance-11895-12000



Trading Longs: GDX, UNG, DBC, FCX, LYB, DWDP, CMCSA, MAS, TRP, QSR, TSCO, HD, DHR, XOP, USO, FLT, PCAR


Trading Shorts: SIG, KR, GES, CME, CBOE, MO, OI, LB, TWLO, TEAM, CTXS, OSTK, CI, MHK, WATT, EXPE



Simply stated, Tuesday's price action was exactly what needed to happen to have some confidence of markets peaking out in the short run. We saw many indices close down at the lowest level in four days after having recorded upside exhaustion, Breadth confirmed with 3/1 bearish breadth and even heavier volume into Down v Up stocks, the Russell 2000 broke its uptrend, and 3 key sectors stalled out near prior highs: Technology, Industrials and Consumer Discretionary before turning down to make new multi-day lows.

Given that these last three groups are this current year's Leading sectors in terms of performance, we look to finally be at a spot where at least near-term weakness can occur and a short-term pullback could be underway. It's right to be defensive over the next 3-5 days, adopting hedging techniques and/or holding off on buying dips right away.

Outside of Equities the larger move of interest happened in Gold. We saw Gold turn back higher to multi-day highs after what looks to have been a successful retest of March lows. Given the Dollar starting to top out, it looks likely that Gold turns higher, as US 10-Year Treasury yields remain under pressure.


Overall, between now and end of week, it looks right to be Short Stocks, long bonds, long Gold, long Natural Gas. Charts below will help to add some perspective.



ACTION PLAN- 


Long GLD for a rally up to 127- Stops under 120.96


Long UNG for a rise in Natural Gas into end of April/early May with targets at 2.90-2


Long XLB with targets at 61 and stops on daily closes under 56.80


Short IWM for a move down to 151 from 155.2- Stops above 157.4

Short XLK with targets at 72.25

Short XLY with targets at 114.50

Sold FANG basket Tuesday at the close



Additional charts and thoughts below.

below.png

SPX rolled over yesterday to a multi-day low close. While trendlines have not yet been broken, and some might question turning bearish ahead of this development, the combination of Sectors stalling out near key levels while counter-trend sells are present on the heels of the recent stallout in breadth and momentum makes sense to adopt a defensive posture for at least a near-temr pullback. It's thought that weakness likely does not undercut 2785, so pullbacks over the next week should represent buying opportunities.

opportunities.png

Russell 2000 and Small-caps should continue to be avoided near-term, as the break of the near-term uptrend should make IWM weaker than the market in the days to come. While SPX did not yet break its uptrend, IWM did in fact violate this trend. Thus, near-term, one can make the case for pullbacks down to $151 from its current $155.20, which could happen into next week. Thus for the Russell, yesterday's break definitely was more bearish than bullish and signals a good likelihood of further weakness.

weakness.png

Gold looks to have started a move back higher as its recent pullback attempt held above March lows and now the last few days have moved up meaningfully off the lows to multi-day highs. This is constructive technically and the breakout back above 1315 would be a further step in the right direction with movement back above 1325 leading to a more meaningful test of the all-important 1360-75 area. For now, given that the Equity market looks to be stalling out after nearly the best rally in over 16 months, spanning eight consecutive days higher, one might consider diversifying into Gold and/or commodities in general, and should put Gold on the "Front Burner" so to speak as something to watch carefully in the days ahead in the event we see even further follow-through.

Natural Gas spike yesterday likely leads to further gains

April 9, 2019

Mark Newton CMT, Newton Advisors, LLC

Contact: info@newtonadvisor.com



SPX Cash Index

Support: 2880, 2870, 2861, 2848-9

Resistance: 2902-4, 2908-10, 2915-7

Monday Technical Video- 4/8/19

https://youtu.be/dtvdSwy_ptE



Bloomberg Interview Monday 4/8- Natural Gas turning higher

https://www.msn.com/en-gb/finance/video/buy-calls-on-natural-gas-mark-newton-says/vi-BBVJIZX



Webinar Link from last Thursday's Technical Call- 4/4/19

https://youtu.be/kvOxFMEciAw



SPX - (3-5 Days)- Bearish- Reversal Expected Tuesday/Wednesday, Max upside to 2915- Under 2880 should confirm

EuroSTOXX 50- Bearish- Similar to SPX, SX5E has reached areas where it makes sense to lighten up and/or fade this rally. Longs have stops under 3400 and likely max upside to 3500 this week

HSCEI- Mildly bullish- No change-Movement up to 11895-12000 looks possible into Wednesday before exhaustion sets in. For now, China stronger than US near-term



Trading Longs: UNG, DBC, FCX, LYB, DWDP, CMCSA, MAS, TRP, UBNT, QSR, ETSY, REGN, FB, AVGO, TSCO, HD, DHR, XOP, USO, FLT, PCAR


Trading Shorts: SIG, TLRY, KR, GES, CME, CBOE, MO, OI, LB, TWLO, TEAM, CTXS, OSTK, CI, MHK, WATT, EXPE



Fractional gains yet again for yesterday, and yet again, indices look to successfully battled back to close the day having erased the earlier loss. Breadth however barely finished positive and five sectors were down on the day. Specifically for Tuesday/Wednesday, it looks to be problematic that XLY is now right at the level of last Octobers highs while showing evidence of counter-trend exhaustion in this trend. Additionally, Industrials also looks to be stalling out near February's highs and has similar exhaustion, which last time proved to be problematic for this group in late February. Technology has seen some real ability of the FAANG group to play catchup of late, FB, AAPL, AMZN, NFLX, GOOGL, yet XLI looks to have its own level of resistance near last Fall's highs while also showing a similar pattern of counter-trend exhaustion.

Thus, overall the problem certainly isn't with the trend, but yet with the plethora of exhaustion signals now being seen on the benchmark indices on daily charts along with many of the sectors that have led this market over the first three months of this year. Breadth has now begun to slow a bit, and momentum has not been as strong over the last week. All of these reasons are grounds to consider buying implied volatility in the near-term, and/or considering lightening up in some of the stocks which have now reached prior highs similar to the indices themselves. While the intermediate-term trend still looks quite strong from December 2018 lows and not vulnerable to a large correction, the near-term has given a few hints of cautionary signs for those that are watching and might cause this bullish seasonal month of April to be a bit tougher than many expect to continue straight higher.

Outside of Equities, commodities seem to have suddenly taken charge in the last month, despite the Dollar not having really turned lower materially just yet. Some of the precious metals have rallied, while Energy certainly has been a bright spot. Cattle and Lean Hogs have fared well along with Cotton, and rallies in Coffee (if momentum is any guide) seem to be right around the corner. What's particularly bullish however looks to be what's happened to Natural Gas in the last 24 hours as prices have rallied sharply to break the downtrend over the last month after having hit good support. This move looks to extend in the weeks ahead, and pullbacks could be utilized to give this a closer look as a long, given forecasts of potentially a cooler back half of April.



ACTION PLAN- 


Closing out long XRT, XLY and taking profits on the open, Tuesday 4/9

Long UNG for a rise in Natural Gas into end of April/early May with targets at 2.90-2

Long XLB with targets at 61 and stops on daily closes under 56.80


Long FAANG stocks through NYFANG basket, but looking at selling Tuesday, or Wednesday of this week 4/9-10

Short XLK at 76.75 or higher, with targets at 72.25


Short XLY at 118 or higher with targets at 114.50



Additional charts and thoughts below.

below.png

NDX has gotten right back to prior highs, a level which likely will cause some stalling out this week as this represents strong resistance to the advance. The area from 7600 to 7750 should be thought of something to consider selling into initially as prices near this level. Upon any sort of pullback to this uptrend, that's likely the extent of the selling, at least for the month of April.

April.png

Commodities look to be turning higher, regardless of any strong downward pressure in the US Dollar. The last two weeks have seen consistent gains in the Invesco DB Commodity Index tracking fund (DBC) which has helped this reach the highest levels since last November. Trends remain bullish, and this should be an area to consider diversifying into, as this uptrend should begin to accelerate as the Dollar's drop starts to gain speed.

Natural Gas surge yesterday makes UNG attractive to consider as a technical long, as June Nat Gas likely goes from 2.70 back to 2.90 in the short run. After having held a key area of support that held four times since last September, this managed to gain ground to multi-day highs yesterday, rising back up above 2.70. UNG, the ETF for Natural gas (non-levered) looks to be a good bet to rise to $25 in the short run, and longs are favored for follow-through in the days and weeks ahead.

Discretionary still strong while Technology reaches resistance

April 4, 2019

Mark Newton CMT, Newton Advisors, LLC

Contact: info@newtonadvisor.com



SPX Cash Index

Support: 2854, 2840, 2820

Resistance: 2875-6, 2880, 2885-7

CNBC 4/3 interview on Semiconductor stocks & why best to hold off

https://pub-origin.cnbc.com/video/2019/04/03/why-these-investing-pros-arent-buying-into-the-chip-stock-surge.html



Wednesday 4/3 Mid-day Technical Video Link

https://www.youtube.com/watch?v=Ox7bLKRJsOE



Thursday 3/28 Technical Webinar Link

https://youtu.be/O3A9Irxn18g



CNBC Fast money interview on FDX, Transports from Tuesday 3/19/19

http://bit.ly/CNBCfastmoney031919




SPX - (3-5 Days)- Expect Stallout/reversal between Thursday and next Monday, with resistance at 2905. Stops are raised to 2848 on a close



EuroSTOXX 50- Mildly bullish- No change- Expecting 3425-3460 into next few days before a stallout and reversal. Stops on longs under 3325



HSCEI- Neutral- No change- Prices have reached highs of one-month range, and while 11900 can't be ruled out. the risk/reward is not as good near-term. Under 11420 is a stop for longs



Trading Longs: CMCSA, MAS, ROKU, DLTR, TRP, GDDY, NBIX, MDCO, DVAX, COLM, UBNT, QSR, HEAR, ETSY, REGN, FB, AVGO, TSCO, HD, DHR, XOP, USO, FLT, PCAR


Trading Shorts: OSTK, CI, MHK, WATT, EXPE



Stocks staged just minor reversals from intra-day highs yesterday, though no real damage was done by the close, with prices failing to take out prior lows and trends still very much in place. Breadth came in marginally positive around 3/2 with Tech and Discretionary doing all the heavy lifting, while we saw some definite evidence of Staples and Energy making pretty sharp pullbacks.

Overall, my view is that Technology has limited upside here, based on the S&P 500 Information Technology index back up at former highs, while momentum has lagged for the last two months. Parts of Tech like the FAANG group still look to be able to extend on a 3-5 day basis, but my thinking remains that it's right to consider taking some profits and shifting into Healthcare or into Transportation. On a very near-term basis, there was some definite strength in the Consumer Discretionary group which still looks to lead between today and early next week, while the Consumer Staples group looks to be breaking down and can be avoided.

Outside of Equities, there is some real weakness in Treasuries near-term as yields have turned up to follow stocks over the last few days. Meanwhile the Dollar has been gradually getting weaker, with the Euro trying to firm while Pound Sterling has found a small bid given the UK Parliament's decision to block a No-deal Brexit. Bottom line, the trend in US Dollar can't be called bearish just yet in the short run, and it's still difficult to expect prices to fall right away. WIth regards to Yields, it's thought that another 1-2 days of yield bounce is possible, but this should pave the way for a reversal back lower, and could coincide with equities following suit in the weeks ahead.

Overall, its right to be far more selective at this stage of the rally and there are some cyclical facotrs that could allow for a minor top in stocks by early morning Friday into next Monday. If this doesn't work, than 4/9-4/10 is the next most important area. VIX in particular rose to new multi-day high closes yesterday, which is odd given the market rally and typically makes it worthwhile to pay attention for the potential for a reversal. However, it's thought that a 3-5% pullback into end of April would be buyable, and for now, cannot be confirmed given the lack of weakness. One should stick with Discretionary into next week and buy weakness in Healthcare, while avoiding Tech at this point along with Staples.



ACTION PLAN- 

Long XRT, Lowering targets to 45.75-46.25 with stops raised to 44.75 on a close


Long XLY with targets at 118 and stops raised to 113.50

Long FAANG stocks-AMZN and NFLX are catching up and target for NYFANG index (bloomberg is 2800 with stop at 2612

Long TLT- Target 127.5. Use this weakness to add to longs with stops under 123



Additional charts and thoughts below.

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S&P has now risen for five straight days, which often historically has led to at least a bit more strength in the days to come. In this case, prices are entering the first of two key time zones for trend change. The first starts Thursday into next Monday, and the second will take place at the end of next week. Breadth has stalled a bit, while momentum has failed to keep up with prices push back to new highs. Overall, until there is evidence of price turning down to take out 2848 on a close, it's worth still sticking with this rally, but yet looking to rotate out of groups like Technology and into Healthcare. Specifically for the next 3-5 days, Consumer Discretionary looks to be an outperformer into next week, and should be favored for outperformance. In regards to S&P, we'll need to see some degree of weakness to pay attention with daily closes under 2848.

2848.png

Technology has now risen right back to former highs, a level which should provide some resistance to this rally. Semiconductor stocks in particular have risen more than 35% in the last 3 months and now up to similar levels. Momentum, meanwhile, has failed to keep up with price action , and this combined with former resistance, could be important in allowing for a slowdown in Tech in the coming days. Overall, it looks right to sell into this move in Tech and consider diversifying into different sectors.

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Consumer Staples has broken the trend from December over the last two trading days. It was thought that the flight to Defensive might prove short-lived, and with the equity rally having persisted of late, this group has now weakened enough to violate its uptrend. This is a bearish development and should lead to additional underperformance in the days and weeks ahead after this rally.

Markets very close to resistance, but still no meaningful signs of Reversal

April 2, 2019

Mark Newton CMT, Newton Advisors, LLC

Contact: info@newtonadvisor.com



SPX Cash Index

Support: 2854, 2840, 2820

Resistance: 2875-6, 2880, 2885-7



Monday 4/1 Mid-day Technical Video Link

https://youtu.be/lflO4goX59E



Thursday 3/28 Technical Webinar Link

https://youtu.be/O3A9Irxn18g



CNBC Fast money interview on FDX, Transports from Tuesday 3/19/19

http://bit.ly/CNBCfastmoney031919





SPX - (3-5 Days)- Mildly Bullish, expecting 2880-5 but raising stops to 2819 for longs on a closing basis. SPX looks close to making a near-term top, as counter-trend exhaustion is very close, within 2-3 days, while negative divergence is now present on this rise while Technology is close to resistance. For now, a mildly bullish stance is correct for the balance of this week, until more meaningful reversal gets underway.



EuroSTOXX 50- Mildly bullish- expecting 3425-3460 into next few days before a stallout and reversal. Stops on longs under 3325



HSCEI- Neutral- Prices have reached highs of one-month range, and while 11900 can't be ruled out. the risk/reward is not as good near-term. Under 11420 is a stop for longs





Trading Longs: COLM, UBNT, QSR, HEAR, ETSY, REGN, FB, AVGO, TSCO, HD, DHR, XOP, USO, FLT, PCAR



Trading Shorts: OSTK, CI, MHK, WATT, EXPE



Yesterday's surge carried S&P and DJIA to the highest levels since last Fall, while NASDAQ remained fractionally under last week's highs. Breadth came in nearly 3/1 bullish and Technology and FInancials both showed above-average strength, while Transports played catchup, as Industrials were higher by 2+%, helping the DJIA make a more convincingly bullish near-term breakout.



Overall, upside at this point seems rather limited in the short run given a 2% gain over the last three trading sessions. Specifically, we're beginning to see signs of negative momentum divergence while Counter-trend exhaustion is due by end of week. Additionally, Technology is now within striking distance of former peaks, and in dire need of relief from other sectors. Thus, while sentiment could turn a bit more positive on early week gains, the risk/reward of new longs from Tuesday-Friday is sub-par. While this doesn't bring about a chance to sell into gains for anything meaningful just yet (and any Tuesday weakness would actually be buyable), Im not expecting that strength is meaningful in getting above 2900, but likely stalls out at 2880-5 by Friday. Overall, i am entering Tuesday with a "mildly bullish" stance between now and Friday, though am not looking at initiating any new index longs, and will be looking to pare down longs into end of week this week on a bit more strength as a few more technical pieces come into place. For now, a selectively bullish stance is a must given the extent of recent gains and where indices lie.




ACTION PLAN- 

Long XRT, targeting 47.50 with stops raised to 44.65


Long XLY with targets at 118 and stops raised to 113.50


Long XOP- Targets 32.50, stops raised to 30.35


Long FAANG stocks-AMZN and NFLX are catching up and target for NYFANG index (bloomberg is 2800 with stop at 2612

Long TLT- Target 127.5. Use this weakness to add to longs with stops under 123



Additional charts and thoughts below.

below.png

S&P not as great of a risk/reward near-term after it moved to close at the highest levels since last Fall. We're seeing some evidence of negative momentum divergnece and counter-trend exhaustion is now just 2-3 days away, which likely will create some near-term resistance and produce some kind of stalling out into end of week. Heading into Tuesday, after a 2% rise over the last 3 trading sessions, I'm not in favor of pressing longs and given the 60 and 120 minute confluence of Demark sells on intra-day charts, actually feel like Tuesday might prove to be a minor down session before prices push on to 2880. Upside at this point is a bit more limited than this time last week, but yet no definitive evidence of any reversals and yesterday's rally came on nearly 3/1 positive breadth with a strong move out of Financials and Technology. The right positioning seems to be to hold longs for now, but not initiate new longs in the indices, and one would use minor dips to buy on Tuesday with the thinking that a bit more upside can happen over the next 3-4 trading sessions.

sessions.png

Technology looks to be making its final "last-gasp" type rally which could send this back to former peaks, but it's thought that this group should stall out this week on further gains, and that upside should prove limited. The SOX chart i posted last week also has shown gains back over 1430 and within striking distance of highs made last March and June 2018 which should prove important. Bottom line, while the trend remains very much intact, one should look towards areas like Retailing, written about in the Weekly yesterday morning, vs looking to press bets in Technology. It's my opinion that this group should stall out, even if temporarily, by end of week, making gains good to sell into. As discussed, reasoning revolves around counter-trend sells along with prior peaks providing resistance.

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After yet another round of Failed votes has thrown the BREXIT deal into further disarray, the Pound Sterling looks increasingly likely to turn back lower in the short run, after a number of weeks of stalling out after just a meager rally. While price action has been largely unchanged vs the US Dollar largely since the end of January, it's notable that recent lows failed to produce any meaningful buy signal from an exhaustion standpoint, similar to what happened at prior lows. Prices remain trending lower from last year and the risk/reward seems to favor selling the Pound as May sets to convene yet again Tuesday. A close under 1.3010 should cause selling down to 1.2785, while movement back higher over 1.3213 is needed to have any sort of confidence in a rise. Thus, the pattern near-term is quite mixed, and on weekly charts it looks more negative, in the next 3-5 weeks, as seen above. Movement down towards recent lows would offer more support to buy, vs thinking any meaningful upside is yet likely.

Transports and Healthcare should play Catchup, while Tech slows

April 3, 2019

Mark Newton CMT, Newton Advisors, LLC

Contact: info@newtonadvisor.com



SPX Cash Index

Support: 2854, 2840, 2820

Resistance: 2875-6, 2880, 2885-7



Tentatively scheduled to be on CNBC today at 2:20-2:25pm



Tuesday 4/2 Mid-day Technical Video Link

https://youtu.be/NEDZiB8nkC8



Thursday 3/28 Technical Webinar Link

https://youtu.be/O3A9Irxn18g



CNBC Fast money interview on FDX, Transports from Tuesday 3/19/19

http://bit.ly/CNBCfastmoney031919





SPX - (3-5 Days)- Mildly Bullish, expecting 2880-5 but raising stops to 2819 for longs on a closing basis. SPX looks close to making a near-term top, as counter-trend exhaustion is very close, within 2-3 days, while negative divergence is now present on this rise while Technology is close to resistance. For now, a mildly bullish stance is correct for the balance of this week, until more meaningful reversal gets underway.



EuroSTOXX 50- Mildly bullish- No change- Expecting 3425-3460 into next few days before a stallout and reversal. Stops on longs under 3325



HSCEI- Neutral- Prices have reached highs of one-month range, and while 11900 can't be ruled out. the risk/reward is not as good near-term. Under 11420 is a stop for longs



Trading Longs: NBIX, MDCO, DVAX, COLM, UBNT, QSR, HEAR, ETSY, REGN, FB, AVGO, TSCO, HD, DHR, XOP, USO, FLT, PCAR



Trading Shorts: OSTK, CI, MHK, WATT, EXPE



Some minor evidence of stallout Tuesday and by day's end, SPX had largely finished unchanged, while NASDAQ was higher by 0.25% and DJIA was fractionally lower. Breadth came in Negative ever so slightly and around half the sectors finished down, led by Consumer Staples and Energy, despite the late surge by WTI Crude. All in all, not a convincing reversal sign for indices, but yet seeing some negative breadth towards the end of rallies typically will be important to monitor over these next couple days. Overall, to have real faith in a reversal, ideally we'll need to see an early rally attempt that fails and moves to new multi-day lows. (At present we've seen four straight days where the open, high, low and close were all higher) The minor pullback we saw from 3/21 into 3/27 failed to do much damage and held the trendline from December lows. Getting below this swing low which hits this trend would involve a close down UNDER 2785, or around 80 points lower. Thus, a minor pullback is possible that doesn't make much progress lower and then pushes higher. Yet, at this stage of the rally with the start of breadth stalling while Technology reaches resistance, we have more evidence that a pullback, even if minor, should be right around the corner.



Two groups could come to the rescue to bail out Technology and buoy the market during the month of April. Transports are one of these which had lagged badly in the last month, but which have come to life recently, with Rails breaking back out to new highs (see CSX, NSC, KSU, UNP) Even the Airlines have managed a bounce, within their respective bearish pattern. The second is Healthcare, which is looking increasingly interesting as a long. Biotech ETF (XBI) along with the Healthcare ETF (XLV) both show triangle patterns where prices are now testing the upper part of this boundary which has already been tested before (and in my thinking, should finally lead to a breakout in this group) Overall, both of these latter sectors are attractive and can be considered substitutes for those wishing to exit Technology in the next 1-2 days.





ACTION PLAN- 

Long XRT, targeting 47.50 with stops raised to 44.65


Long XLY with targets at 118 and stops raised to 113.50


Long XOP- Targets 32.50, stops raised to 30.35

Long FAANG stocks-AMZN and NFLX are catching up and target for NYFANG index (bloomberg is 2800 with stop at 2612


Long TLT- Target 127.5. Use this weakness to add to longs with stops under 123





Additional charts and thoughts below.

S&P has now pushed higher off its trend from December for four straight sessions, with SPX cash index recording exhaustion, while Futures contracts for June show these to be two days away. Meanwhile momentum has made a pattern of lower highs than either of the two recent peaks. Bottom line, the trend remains positive and for now, no evidence of any reversal. Thus, a bit more strength looks possible with targets at 2880-5 for SPX cash. If Transports and Healthcare can both follow through on recent strength, this would be seen as a big positive at a time when Tech is thought to face major resistance and likely stall out by next week. To have real confidence in any pullback, prices will need to get down under 2785, which represents the uptrend line and last swing low. Until that time the trend is bullish, but one should look to sell into strength over the next 2-3 days.

Transportation stocks have been the number 1 performing SPX GICS Level 2 group in the past week, showing +6% performance out of 24 groups. The DJ Transportation Avg, shown above, has now officially begun to play catch-up, and technically has just exceeded the entire downtrend from September, something that most market indices accomplished around two months ago. Near-term, while February highs could represent some minor resistance, this breakout is worth highlighting and should lead to outperformance in the weeks and months ahead. Rail stocks in particular are the most attractive part of this group, and stocks like CSX, UNP, KSU, and NSC have all shown recent breakouts that make this area worth highlighting.

highlight.png

Healthcare now is on the verge of breaking out after nearly a full month of sideways trading. This sector lagged throughout the month of March, but now is well positioned to move higher after pushing up to test the upside border of this Triangle which has been intact for the last couple months. Patterns look similar in both XLV and also XBI and favor being long after already one successful test, thinking that the second retest won't hold, and we'll see a breakout of this pattern. Overall, it looks right to favor Healthcare for a bounce this month and to play catchup after having lagged this last month. Technically, this sector remains good structurally but just looks to have consolidated, which has helped to alleviate overbought conditions.