Below we take a look at the one week performance, very small sample, of all 11 major S&P sectors, and overall bulls are seeing some positives. The lagging groups emanate from a defensive nature with real estate staples and utilities among the bottom 4. Up near the top, at number 3 are the industrials with a gain of almost 3%. The rails have been a big contributor to that move with KSU CSX and UNP all nearly 4% last week and following through this week too. FAST in the suppliers space sprinted higher by more than 14% last week in the best weekly volume in 11 months. What has not been participating in the nascent vigor are waste management names, once stalwarts in the arena (defense names such as LMT NOC and KHX). WM dropped fractionally last week, but peer RSG is sporting a bearish head and shoulders pattern with an 85 neckline. Time to put the chart in the bin, pun intended?
The consumer is alive and well and it can be documented with the strength of names that transport them. However some will do a better job of it than others, and that will show up in the technicals. Perhaps that is a management issue, and an example of where the fundamentals can compliment technical analysis. Whatever the case may be PRICE action is how we are paid and judged upon, so it makes sense to honor it. UPS which REPORTS next Tuesday before the open it, currently sits just 4% off most recent 52 week highs, while FDX is now 36% off its own most recent yearly peak. UPS is nearing a double bottom pivot of 120.50 which potentially can be taken out on a well received earnings reaction next week. Those waiting for mean reversion between these two giants, may have to wait a bit longer.
The transports are obviously an excellent indicator of the genuine health of an economy. Of course it is a diverse group with trucking, rails and airlines, etc, but it also plays a role with purists in regards to Dow Theory. Below is the chart of SNDR and how it appeared in our 10/2 Industrial Report. It is a relatively new IPO coming public 2 1/2 years ago, and was well regarded rising 24 of 37 weeks ending between 5/19/17-1/26/18 before being halted right at the round 30 number. Fast forward to the present and it has advanced 13 of the last 19 weeks, and on its WEEKLY chart is sporting a bullish inverse head and shoulders formation with a neckline of 23. A break above there can be added to and would carry a measured move to, you guessed it the round 30 number. Triple tops are a rarity, if that were to occur it would be likely to power higher from there.