Douglas Busch

FDX Redheaded Stepchild Again? The two delivery giants within the industrial group seem to be headed to different destinations, pun intended (XLI on a 3 month look back period is the best major S&P sector performer of 11). Over the last one month UPS is lower by 1.1%, while FDX is higher by 5%. FDX is trying to maintain altitude above a recent break through a 289.86 cup with handle trigger taken out on 11/24, and we know the best breakouts tend to work right away so it needs to get moving higher soon (it has traveled from the round 100 number in mid May to near 300 this week so it may need a prudent sideways PRICE pause too). The chart below of UPS shows a sideways range between 155-175 during the last 4 months, remember the industrials have surged during the time period, so for it not to join in on the party is a bit concerning. The last 2 weeks backed off near highs for the intraweek range the week ending 10/30, that fell 9% in the second largest WEEKLY volume in the last 7 months. The freight, I mean the weight of the stock is feeling heavy. 

No Gray Area: The Nasdaq is at a critical juncture here without a doubt. PRICE has memory and there are a lot of conflicting feelings where we tread at the moment. The very round 12000 number is a battleground to say the least, and I get the feeling that we will not spoon around the figure here. We are either going to bust through powerfully from the bullish ascending triangle we see below, or we will fail and drop precipitously. It seems many are counting on a bullish end into 2020, but is that too obvious, or will the notion be correct from many salty traders I have been chatting with that state, "consensus if usually right"? Or to complicate matters is todays CLOSE above 12000 simply a benefit of this commonly bullish, holiday shortened week? What I do know is that if that Nasdaq is going to lead software must get its act together. The IGV is UNCH over the last one month period, while the SMH has advanced 11% over the same time period. One can not expect the semis to burden all of the heavy technology load. Another worrisome stat is that the XLK is the worst major S&P sector out of 11 over the last 3 month time period. 

New Top Ten Holding: Within the automobile space there has been some robust movement. Many assess the vigor to EV, but again our focus in purely on PRICE action, and let others determine the why. Of course no conversation can be complete without mentioning TSLA, which Monday blew through the very round 500 number, that negated a double top with the 8/31-9/1 sessions (the week ending 11/13 found support several times at the round 400 figure). Chinese play NIO has advanced more than 1000% YTD. HMC and TM are bull flagging as Japan comes back in vogue. Even F has the feel of a magnetic pull toward the very round 10 number, as it has not recorded back to back WEEKLY losses in more than 4 months. Below however is our focus on another name in GM, and how it is perhaps putting a stubborn round number resistance level in the rear view mirror, pun intended. With just 4 sessions left this month, if it can CLOSE above the 40 figure, it puts behind it a number that was steadfast in its hindrance. It is as of this weekend a new top 10 component in the XLY, at just above 2%, a respectable milestone for the automaker.

Revealing Ratio Chart: Investors have different ways of comparing "risk on/off", to get a feeling whether to have the accelerator on, or the brake when it comes to their individual market exposure. One may look at the ratio chart of growth vs value, with the VTV versus the VUG. In the consumer space they will compare the discretionary group to the staples. Some would keep it more simple and perhaps look at the Nasdaq over the S&P 500. Below is one I like to use in the diverse healthcare space contrasting the biotechs to the more mature medical equipment plays. One can see the significant move that the XBI made against it this week. It took 6 attempts to break above a bullish ascending triangle, and if retested should become solid support. Many biotech names recorded powerful moves this past week with APLS TRIL (thank you AJ) TWST and KOD, while equipment plays like BSX TNDM and SILK have faltered recently. 

Undesirable Delivery: As many consumer discretionary names have made a solid push higher recently, the dominant chatter about the 800 pound gorilla in the room in AMZN, has been muffled somewhat. And that may be for good reason, as we take a look at the chart below. It is lower 7 of the last 10 weeks, and 4 of the last 5, and volume trends are a bit worrisome. AMZN is slightly underperforming, down .5%, while the consumer ETF is up almost 1% (the XLY is looking at yet another 3 week tight period depending on Fridays CLOSE, and it did just that the 3 weeks ending between 10/9-16 all CLOSING within just .54 of each other). The stocks 50 day SMA has been sloping lower for one month now, and as always one can paint their own bias either way. The bearish case has been stated, but the confident narrative would be it is digesting the enormous move higher during a 21 of 24 week winning streak the weeks ending between 3/20-8/28, that rose more than 1800 handles. I am not involved either way, and as always PRICE will be the final arbiter.