Below is the performance of all 11 of the major S&P sectors on a 6 month look back period. One sees that the industrials are just above the UNCH line, the ninth worst acting group (interesting to see that the top 3 sectors below are all defensive in nature with the utilities occupying the top spot). Some outsized moves among leading names in the space today came from UPS, which continues to absolutely dominate FDX, although UPS did slice its 50 day SMA in active volume losing more than 3% Tuesday. KSU which has been a beacon of light within the somewhat soft rail group dropped 3% today, breaking BELOW a bull flag formation. CAT is firmly in bear market mode down 23% from most recent 52 week highs, and AAL is now 36% off its most recent yearly peak. If one looks hard enough they will find some names shrugging off the overall weakness, like SAIA or MTZ, but they are going to start to have to look much harder for names thriving.
Smooth Landing For Former Controversial Name?
Boeing’s stock has been trying to put its recent past behind it, and there is something for both the bulls and bears to debate whether that is occurring. It has advanced 4 of the last 6 weeks, with gains of 7.7 and 4.6% the weeks ending 8/23 and 9/13 with each being accompanied by the strongest weekly volume in the last 2 months. The bears will add that it is stalling at a WEEKLY double bottom pivot of 382.58, with last week CLOSING above it by less than .30, and is yet again shying away from the trigger this week. Comparing it to ERJ, which was not able to capitalize on the follies of BA, the latter looks better. ERJ now sits 28% off its most recent yearly peak and has been making lower highs and lows since the beginning of March ’18. The ratio chart below comparing BA is strong in Boeings favor the last couple months, and there should be little turbulence going forward to stop it, pun intended.
The rails often have a very good feel on the genuine overall health of the economy. Obviously they move goods across the country, and the space has been a soft one. Names like CP and CSX and now in correction territory, down 12 and 17% from their most respective 52 week highs. Below is the chart of UNP and how it appeared in our 9/9 Industrial Note. Our 169 buy stop on the short idea was a bit too tight, but a red flag was the break above a cup base that unraveled way too quickly. We know the best breakouts tend to work out right away. It has lost ground 10 of the last 12 sessions and now trades 13% off its most recent yearly peak. This current break below the 200 day SMA does not look like it may recapture the secular line promptly like it did back in January and September.