Industrial Sector Review: 5/9/25
Industrial Revolution: One major S&P sector has been making its presence felt over the last one quarter. The industrials have quietly been climbing the leaderboard and this is a group one wants to take a very close look at if this rally is just getting started. Over the last one week the XLI is the best performer up nearly 3%. Over the last month, it is the second best of 11 sandwiched between the surging technology and discretionary spaces, and during the last 3 months, it is the 3rd best behaved. Solid consistency fueled by defense, aerospace, and waste services. Perhaps not the most sexy, and within the most economically sensitive areas are fragile including railroads, delivery services, trucking, and airlines. Ideally, bulls would like to see the IYT play some serious catch up to the XLI on a PRICE comparison chart here. I still get a chuckle out of the top holdings list with UBER being the second largest and it is now well above the 77.68 double bottom breakout pivot from 4/24 and any pullback toward 80 should be bought aggressively (even rival LYFT is up after market handsomely). Remember the days of TSLA up, UBER down correlation? Me neither. Rounding out the entire group is the bullish action of the XLI below. This move could just be getting started.
Consumer Sector Review: 5/8/25
Builder Breakdown? Within the diverse consumer discretionary space, investors like to keep a close eye on the homebuilding sector. Of course, homeowners overall feel better about themselves the more valuable their properties are, but looking at the individual names the group feels heavy. That could change very quickly but the daily chart of the XHB below shows very little to like since the election last year. The ETF is down 25% from those highs and its WEEKLY chart shows how it undercut the very round par number, with consecutive doji candles, like a hot knife through butter the weeks ending 2/28 and 3/7. This will be influenced by the 10-year yield which did complete a bullish morning star pattern on 5/1, reclaiming its 200-day SMA in the process. Looking over the top 10 holdings is always an interesting endeavor with just one pure-play homebuilder within with PHM at number 9 (the ITB is a much better representation but the chart looks identical to the XHB). Imagine what the chart would look like if top-holding TT, which is on an 11-session win streak was not current. Notice how it has traded between the very round 300 and 400 numbers over the last month and it has acted strong since the completion of the bullish island reversal with the gap up on 4/30 (after the gap down on 1/27).
Consumer Sector Review: 5/2/25
International Internet Slugfest: Scouring the planet and comparing mega-cap heavyweight internet players shows some interesting divergences. As a whole one could look at a ratio chart of our domestic names via the FDN and lay it over the KWEB and one would see a very soft start to 2025, but the FDN is carving out a bullish inverse head and shoulders pattern. If one wanted to look at domestic versus the southern hemisphere, with individual names, they would highlight MELI against AMZN which is lower after hours on a soft earnings reaction. The ratio chart here is clearly in favor of "the AMZN of South America" in MELI since last December, and if the after-hours action is any indication it will take another leg lower. While MELI came within a sniff of 52-week highs Thursday before a small reversal, AMZN is still 23% off its own annual peak made in early February. MELI is yet another example of the growing number of emerging breakouts as it took out a double bottom pivot of 2202.10 on 4/25 but Thursday did record a small bearish dark cloud cover candle into the filled-in black candle from 2/21. Let's see how AMZN CLOSES Friday to end the week. I think as long as this remains above 180 this will take out the add-on double bottom later in the second half of 2025.
Canada
Two Long Ideas: Nutrien: Agricultural inputs play up 27% YTD and 8% over last one year period. Dividend yield of 3.8%. Name 6% off most recent 52-week highs and MONTHLY chart shows first bullish MACD crossover in more than 4 years. Double bottom base taking shape (79.40 trigger) and look for May to record first CLOSE above 50 MONTH SMA since September 2o23. Enter on pullback into double bottom breakout. Entry NTR.TO 77. Stop 73.
Financial Sector Review: 5/1/25
"Depositing" Gains? Unless one has been living under a rock since the start of 2025 they would know the defensive stance the market has taken. As of Wednesday's CLOSE, the best-performing major S&P sectors were utilities, staples, healthcare, and real estate, followed by the financials. Not endearing to growth investors, who are looking for some reversion to the mean from tech and discretionary which make up the cellar. The daily chart below of the XLF shows it taking baby steps toward potential leadership with a reversal off the 21-day EMA and 200-day SMA. A break above 49 would put an end to lower highs in 2025 and put a double bottom pivot of 51.01. It is also no secret that domestic banks have been underperforming international with the ratio chart against Europe via the EUFN showing a stiff downtrend since last December. Perhaps US banks are ready to start showing some strength against their European counterparts with the bullish hammer candle on the MONTHLY ratio chart and with some more follow through will carve out a double bottom base. Everyone likes to cite JPM and GS which are of course important, but BRK/B is still the top holding in the XLF at 14%, and April recorded a bearish hanging man candle.
Industrial Sector Review: 4/30/25
Flying at High Altitude: Boeing may not command the relevance in the PRICE-weighted Dow as it once did when it traded above 400 in February-March 2019, but it is certainly making its presence felt as of late. It is still a top 5 holding in the XLI which is hitting some resistance in the 130 area at a downward-sloping 50-day SMA after a bearish death cross (notice the back-to-back spinning top candles last Friday and Monday which speak to fatigue after the 17 handle run off 4/7 the lows). Below is the daily chart of BA and it has enjoyed a rapid rise and is it too easy to think that this move into the 180-185 area for the sixth time in 6 months will fail? Of course, no one knows the answer to that question but a CLOSE above the 184.50 would be a good start. A 55-point move off the early April lows is a lot and some consolidation up here may be in order but on the WEEKLY chart bulls would love to see a pop above the 200 WEEK SMA where it has been rejected four times (notice since the election it has acted well against XLI peers on the ratio chart). The MONTHLY chart is forming a bullish hammer candle and the last 2 times it touched near the 125 level on a CLOSING basis back in 2020 and 2020 it eventually rallied to well over 250.
Consumer Sector Review: 4/29/25
Technical Sector Breakout List Growing: Technology has been making amends and it is just the group market participants would like to see take the baton in this nascent rally. Measured by the XLK, technology is still just the tenth best-performing major S&P sector YTD, outperforming just consumer discretionary with each down in the neighborhood 10% so far. We have mentioned the growing tech double bottom breakouts from PLTR CRWD and NFLX, and it is now refreshing to add some consumer names are following their lead. For example, EAT a best-of-breed casual diner, is just above a 158.45 double bottom trigger, and is stalling somewhat and had been above the pivot intraday the last 3 sessions before CLOSING north of it Monday (this is a name that demonstrated solid relative strength not even coming close to touching its 200 day SMA in the recent market frailty). The daily chart below of CVNA, which REPORTS next week, is just above a double bottom trigger and would like to see this push stronger away from it with the shooting star candle last Friday. On the MONTHLY chart it is carving out a very deep cup with handle base and bulls or bears can paint their bias with the former saying April is a bullish hammer, and bears a hanging man.
Technology Sector Review: 4/29/25
Nasdaq Thrust: Many like to proclaim a true rally can not occur without the financials. I would say technology is more important and the MONTHLY chart below of the Nasdaq shows the infrequent contact with the 50 MONTH SMA. It was nearly precise in touching the secular line and was a 50% retracement from the run from the very round 10000 to 20000 from October 2022 to last December. Where is its near-term likely path from here? The WEEKLY timeframe has a nice look to it, with a bullish piercing line and engulfing candle during the weeks ending 4/11 and 4/25, both rising by 7% (those were both the best returns since the week ending 11/11/22 that rose by 8.1%). Both CLOSED in the upper half of the WEEKLY range and it now has a path to the 50 WEEK SMA which is just above the 18000 figure. In hindsight, the rare contact with the oversold 30 RSI number was an excellent signal. Notice on the DAILY chart the third time was the charm in breaking above the bear flag breakdown, which did meet its measured move lower of roughly 2500 handles. My feeling is this still has another 1000 handle run, on the daily timeframe that will be near the declining 200-day SMA. If and when that occurs we can reassess from there.
Consumer Sector Review: 4/25/25
"Just Go Long It": Nike, a former American icon, has been taken to the woodshed. Is its time in the penalty box over? I can only speak from a technical standpoint but from this lens, I think the answer is yes. The WEEKLY chart below shows back-to-back spinning tops the weeks ending 4/11 and 4/18 and these types of candles are adept at signaling potential trend changes from the prevailing direction. Combining the 14.5% losses the weeks ending 4/4-11 in enormous volume is a sign that bears were unable to follow through to the downside and the name feels washed out now. The MONTHLY chart shows if this can CLOSE above 60.59 that would be a major win for the bulls as the stock has been well below the 50 MONTH SMA intramonth. Options activity has been bullish for the name with put sales, and it looks ready to recapture its former glory. A finish above the 50 MONTH SMA would set up an add-on buy point through a double bottom pivot of 120.80, perhaps in late 2026 or early 2027. This name is a top ten holding in the XLY and a gap up in the next few sessions would complete a bullish island reversal. The DAILY chart here also shows a bullish engulfing candle and doji on 4/4 and 4/11 to add to the allure.
Healthcare Sector Review: 4/24/25
Biodegradable Biotech Breakouts: Biotech investors and Met fans have something in common. We have been conditioned to accept defeat. But could sentiment be becoming so bad in the group, that even a small bit of good news can get the space rocking again? Wednesday did complete a bullish island reversal with the gap up, although the XBI CLOSED 2.5% off intraday highs on a candle which could be considered a bullish inverted hammer. Some green shoots are the strength on an awful tape this Monday, as the XBI was green for a good portion of the day. Sure we may be cherry picking but that could have been a tell. Since the devilish intraday low of 66.66 on 4/9 with that huge bullish engulfing candle rising more than 7% it has not declined in back-to-back sessions. To demonstrate how washed out sentiment is, the XBI is looking for its first 3-week win streak since last June and last week did record a rare doji candle (the only other one in last 2.5 years was one at the top the week ending 9/20/24. Top ten holding GILD REPORTS after the CLOSE Thursday, and will give us a good feel what to expect going forward. Will this strong-performing mega-cap start to put some capital to work via acquisitions that could finally start to get this group going in the second half?
Technology Sector Review: 4/23/25
Baby Steps: Technicians for one thing judge a healthy market by how many breakouts are not only occurring, but more importantly how they are acting POST breakout. We know the best ones tend to work right away and follow through, and this behavior has been non-existent as of late. Could that be changing with Tuesday's break above a double bottom trigger just below the very round 1000 number? We will find out how it finishes the week over the next few sessions. Remember we looked at PLTR and it was able to CLOSE above its 98.27 double bottom pivot just one session but today completed a handle on that base and can be added to or initiated with a buy stop above a 99.09 trigger. CRWD has vacillated between the very round 300 and 400 numbers but has shied away from its attempted break above a double bottom trigger of 392.79. Will the third time be the charm for a legitimate breakout for NFLX? It is possible fledging breakouts will gain more confidence and take their cue from it but that remains to be seen. PRICE must confirm but Tuesday was a good start. Tuesday was a nice CLOSE above the pivot although it CLOSED off intraday highs. Lets circle back on this one at the end of this week.
Consumer Sector Review: 4/22/25
Start Your Engines: Earnings season will start coming into hot and heavy after the banks kicked off the festivities recently, and perhaps there will be nothing more anticipated than TSLA tomorrow after the CLOSE. The CEO has been devoting almost all of his time away from the company and that may be reflected in the PRICE action following. Below is the daily chart and one can see the bear flag, and Monday has now filled in the gap from the session 4 times, and if a stock gives you multiple chances to get in at a specific location that will often play out soon as a bull trap. Of course, with earnings Tuesday afternoon, I would never endorse blindly putting on a position and the WEEKLY chart has a mixed look with two bullish hammers followed by a couple of bullish inverted hammers and then a bullish engulfing candle during the 5 weeks ending between 3/14-4/11. This all happened while retesting a bullish inverse head and shoulders formation. The MONTHLY failure to break above a 414.60 cup base pivot that started with the doji candle in November 2021 (bounced precisely off the very round par number in January 2023) last December and this January was foreshadowing the recent weakness.