All but one of the 14 major market sectors was up today.
More importantly… The top 3 sectors in our summary table (sorted by 6 month change) were 3 of the 4 biggest movers. This is good news for the bull market – SMH, XLK, and XLV reasserted their leading trends.
Additionally, the Biotech’s (IBB), Big Brother in the Modern Family, was what fueled the advance in the more general group of Healthcare (XLV). This is noteworthy because the tone of charts and the media chatter, has shifted over the last several weeks to a belief that this sector will remain hot due to reasonable valuations and increasing M&A activity.
Bulls love active M&A in Biotech!
The 4th big mover was transportation, IYT, which has been a frequent topic of conversation in this report over the last few days. Its head fake breakdown reversal pattern continued its surge higher.
If IYT can clear the 170 level it’s likely to get the media excited as the bulls will gain a new level of confidence.
Furthermore, interesting action was not limited to sectors today.
Another notable market mover today, was the U.S. Dollar (UUP). After a breakdown below a multi-year range low yesterday, it popped back up over the breakdown level. Additionally it is sitting on a 200-week moving average. I cover how to potentially trade it in the notes below.
The final interesting observation on today’s markets is that the VXX did not sell off as much as one would expect with such a strong day in stocks. I wouldn’t call this a reason to be bearish about stocks, but I would consider it a reason to watch it for a long trade when you feel stocks are ready to correct.
S&P 500 (SPY) Nice breakout. Look for support at 245.60-.50, then 244.60, today’s low. Significant at 246.50 area then 246.50 and 247.50.
Russell 2000 (IWM) Support at 137.80 and then 137.25 and 136.25. The big number to clear is 139.
Dow (DIA). Didn’t rise with the market. Support at 217.50 then 216.60. The big resistance is at 220.
