Housing Comfort? Markets roared to start the week Monday, with the lagging financials the big winner up well more than 2%. The groups bulls want to see underperform were right on cue too with the staples, utilities and real estate all LOWER on the day. The discretionary group displayed some odd behavior today with the lagging auto space showing strength, and the homebuilders one of the worst acting subsectors within the consumer arena. LEN PHM and TOL brother all CLOSED near the UNCH mark today. TOL and LEN still remain in bear market mode off more than 20% from most recent 52 week highs, not the best of action. Below is the chart of the ITB and it is currently testing a short double bottom breakout trigger of 35.46 taken out on 3/27. All of the aforementioned names are taking shelter right above their 200 day SMAs, pun intended. Under the Hood of Retail: We are all aware by now the changes in the major S&P sector ETFs. The XLY is the more followed fund, but remember it is dominated by AMZN, and that is a bit of an understatement as it makes up nearly one quarter of the ETF. Below is the ratio chart contrasting the XRT to the S&P 500. It is a more clear picture larger umbrella of names in the group. For example to largest component in the XRT, KMX represents just 1.4% of the ETF. It is heavily weighted to apparel, or clothing names, and the chart below suggests they are not pulling their weight against the S&P 500. Lower lows and highs are in place for the last 5 months.  Examples: I may sound like a broken record stating the the best breakouts tend to work out right away, but the quicker one can be convinced of this the better. Below is an excellent example of GRMN and how it was profiled in our 3/28 Consumer Report. The stock is now higher 13 of the last 14 weeks after a push off the round 60 number in late December last year. A 16% move the week ending 2/22, in the strongest weekly trade in 2 years, was digested well for 4 weeks before last weeks break above a bull flag. The measured move is to the very round par number, which could be hit later this year.

Rails on the Run: Over the last one month period the industrials continue to lag, edging out the seemingly perennial laggard financials. In that time frame they have dropped 2.1%, and are only one of three major S&P sectors that fallen fallen during the last month (healthcare down fractionally). Transportation was a big mover Thursday as the IYT recorded its first 3 day winning streak in over one month. Lower highs are still in place since last September as the airlines have been an overall drag. A potential break above the downtrend in place on the ratio chart could be a nice welcome to drive the group higher, pun intended. Airline Angst: Looking at the chart below the first thing that comes to mind is hard landing. The airlines have weighed down the transports, but peering over the arena, one could make the case for an oversold bounce here. Will it be just a relief rally or the beginning of something substantial? One would have to go with the former until proven otherwise as the downtrend is still firmly in place. SAVE looks like a good risk/reward scenario as the gap from the 11/25/18 session was recently filled and it is trading just above the very round 50 number and upward sloping 200 day SMA. Examples: Any stocks that one has in their portfolio that has not participated in the ramp up we have seen in the last 3 months since the late December lows so treat that name as a red flag. Below is an example of just that with the chart of GBX and how it appeared in our 3/13 Industrial Report. It is now lower but 49% from most recent 52 week highs, and has declined 17 of the last 24 weeks and this week is off by another 2% so far. This is certainly not a name one wants to go long with, but a cover of the short near the round 30 number seems reasonable as that could act as support dating back to October '16. 

Biotech Bubbling: Healthcare overall is still in the 2019 doghouse. The sector cellar dweller is still the worst performer on a YTD basis, yet still higher in the 5% neighborhood. Below is the chart of the XBI and it shows some technical strength as Monday registered a bullish reversal off rising 50 day SMA, although the line still swims below its 200 day SMA. The positives are that it is holding its recent bullish ascending triangle breakout, and has filled in a gap successfully. However we know breakouts are normally retested before they can resume their hopeful advance. This one has been tested twice now, and another could prove fatal.  Providers Peril: Healthcare is a very diverse space and most of the attention is dedicated to biotech and pharma names. The devices continue to register nice advances with the IHI just 2% off most recent 52 week highs. One section of the group that does not garner much thought are the healthcare providers. There are just a couple ETFs dedicated to them, and below is the chart of the IHF. It trades on average less than 100K shares a day, but it gives a good illustration of what is happening with individual names. Two of the top five largest holdings in the fund, CVS and CI are deep into bear market territory lower by 34 and 28% from most recent 52 week highs respectively. Examples: Spinoffs are often a good way for parent companies to unlock shareholder value, and is giver the newly formed company some autonomy to have a singular, narrow minded focus. Below is the chart of ELAN, a good example of a recent spinoff and how it was presented in our 3/19 Healthcare Report. A series of lower lows since last September, obviously not the best time to start trading on your own, was halted earlier in March. It seems to becoming more comfortable above its 50 day SMA, which has flatlined, and this name deserves to be on investors radar with the new found strength.