The Bulls Are Getting Stronger

Instagram picture by ‘mebysshe’

If look at only the top of today’s picture you may find it hard to figure out what all the green things are, but when you see the bottom half, a dock, the top makes sense. Sounds like the market. Keep your eye on the whole picture.

Yesterday I focused your attention on IYT, XRT and KRE as the Modern Family Members that have spent the last couple weeks rising from their technical depths of despair.

I also suggested that they may be looked upon as the fuel for the market’s next bullish move higher.

Today the market as a whole was mixed and seemed interested in, but unable to, move higher.

IWM was the strongest of the stock indexes, but it’s also the farthest from its all-time highs. This seemed to be the general pattern today – buy the laggards, and sell strength.

If you look at our sectors summary table you’ll notice that the percent changes for today where relatively small with only 3 moving more than 1%. The two biggest UP movers came from the two worst performers over the last 6 months – XRT and XLE.

So the trends I spoke about yesterday were very much in play today.

The one sector that fell more than 1%, XHB, has a solid six month trend and until today was also the top mover over the last 5 days. Sounds like it was just time to take profits.

This is healthy sector rotation, and how bull market pause before advancing.

This doesn’t mean the current leaders are in trouble, it means the bulls are getting stronger.

S&P 500 (SPY) Big breakout continues higher, but it was a consolidation day. Look for support at 249.60-.30 then 248.80, 248.40, and then big level to hold now is 248. Resistance at 250.60

Russell 2000 (IWM) Nice trend day. Support is now 141.65, 141, 140 then 138.45 is important support to hold. Resistance at now 142.30 and 142.70.

Dow (DIA) Finally got new highs. Support at 221 so that’s now support, then next level at 220. New highs over 221.68