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The delivery services space is a small tight knit group. There are just two major players in the group Federal Express and United Parcel Services. FDX which has been in a downtrend since the beginning of 2018 is now nearly half the market cap of UPS, because of that weakness. UPS which for the most part roughly traded sideways during that same time period, and was a leader against its largest rival, now looks vulnerable. There was some glaring relative strength for FDX last week, which was telling as FDX ROSE 2.9%, while UPS fell 2.8%. The ratio chart below is telling the story.
Consumer Sector Review: 2/24/20
There Is No Place Like Home: With money pouring into bonds, as market participants around the world are starving for yield and parking their capital where it is treated best in the world, it is keeping bond yields depressed to say the least. This is certainly keeping a bid under the homebuilding group. The ITB is on a 3 week winning streak, and higher 6 of the last 7. This week it rose .5%, besting the S&P 500 which fell by 1.25%. DHI and LEN, the 2 largest holdings in the ITB that make up more than one quarter of the ETF, are having banner 2020's up 17 and 27% YTD respectively. The periphery plays are being supported by the underlying groups strength, with perhaps the best example being Home Depot. It rose fractionally this week by .1%, but now trades well above a cup base pivot of 239.41 taken out on 2/10. Even the toxic name Lumber Liquidators is on a 7 session winning streak jumping more than 32% this week (and that was with it CLOSING 12% off intraweek highs), not a typo.
Technology Sector Review: 2/21/20
Recite The Alphabet: As the Nasdaq approaches the very round 10000 figure, currently about 2.5% away, one has to keep in mind just how robust this run has been. In 2020 thus far it has recorded back to back losing sessions, just once on in 1/24-27 which lost nearly a combined 3%. The argument that there is no where else to allocate capital too, and that liquidity controls markets still resonates clearly. Among the "big five" tech names, GOOGL seems to be holding up the best as of late. We did mention we thought FB was a short on an upside earnings gap fill from the 1/29 session, and that looks relevant thus far. Give AAPL and AMZN credit for just trading 2% off most recent all time highs, and MSFT could be the next one to soften in my humble opinion. The chart of GOOGL below is my favorite of the mega cap bunch. Each of the last 4 weeks seems to be digesting the 14 of 15 week winning streak the weeks ending between 10/11/19-1/17. Do not be surprised if this march continues higher in firm fashion, IF a breakout occurs.