Stock Market News – Charting market rotation: Dow industrials take flight amid surging Treasury yields
U.S. stocks are mixed early Thursday, vacillating as market rotation persists after the Federal Reserve’s Wednesday policy statement.
Before detailing the U.S. markets’ wider view, the S&P 500’s
hourly chart highlights the past two weeks.
As illustrated, the S&P is holding its range top.
The index briefly tagged record highs after the Fed’s policy statement — by a narrow two-point margin — though a breakout attempt technically remains underway.
(On a granular note, Wednesday’s session low (3,935.7) closely matched the Feb. closing peak (3,934.8), a level formerly defining the S&P 500’s record close.)
Meanwhile, the Dow Jones Industrial Average
continues to trend higher, tagging the 33,000 mark for the first time on record.
Against this backdrop, the index has registered an intraday record high across seven of the prior eight sessions.
Separately, the blue-chip benchmark has trended atop its 20-hour moving average, the hallmark of a strong near-term uptrend.
True to recent form, the Nasdaq Composite
continues to lag behind.
As illustrated, the index continues to vacillate at the 50-day moving average, currently 13,418.
Separately, the index remains capped by its range top (13,607), a recent near-term hurdle.
Widening the view to six months adds perspective.
On this wider view, the Nasdaq has sustained its bullish reversal, notching three straight closes atop the 50-day moving average.
To reiterate, more distant overhead matches the former range top (13,607) and the February breakdown point (13,729).
Slightly more broadly, the 2020 peak (12,973) remains a bull-bear inflection point. The initial rally atop this area encompassed two 7-to-1 up days across a three-session window.
Looking elsewhere, the Dow Jones Industrial Average has truly taken flight, tagging the 33,000 mark.
The index continues to trend higher even after a massive two standard deviation breakout, encompassing four straight closes atop the 20-day Bollinger bands.
Though due to consolidate at some point, the nearly straightline spike is longer-term bullish.
Meanwhile, the S&P 500 has sustained a less decisive March breakout.
Still, the prevailing flag-like pattern — underpinned by the breakout point — is technically constructive.
The bigger picture
As detailed above, the major U.S. benchmarks are acting well technically, on balance, though a familiar divergence remains in play.
On a headline basis, the Dow Jones Industrial Average has tagged the 33,000 mark, while the S&P 500 has thus far topped about 17 points under the 4,000 mark.
Both round number milestones mark record territory.
Meanwhile, the Nasdaq Composite continues to lag behind, though it has sustained a rally atop its 50-day moving average.
Moving to the small-caps, the iShares Russell 2000 ETF
has sustained a recent break to record highs.
Tactically, the breakout point (230.30) is followed by the post-breakout low (227.36) and the ascending the 50-day moving average.
The 50-day moving average underpinned the March downturn.
Meanwhile, the SPDR S&P MidCap 400 ETF
is digesting a more decisive break to record territory.
Recall the initial spike marked a two standard deviation breakout, encompassing three consecutive closes atop the 20-day volatility bands.
Looking elsewhere, the SPDR Trust S&P 500
has reached record territory less decisively.
Still, the prevailing flag-like pattern is technically constructive.
Placing a finer point on the S&P 500, the index spiked to tag a nominal new high after the Federal Reserve’s policy statement.
Nearby inflection points match the Feb. peak (3,950), the Feb. closing peak (3,935) and support matching the former range top (3,915).
More broadly, the S&P 500 has sustained its mid-March breakout.
The prevailing flag-like pattern — underpinned by the breakout point — signals still muted selling pressure near previously uncharted territory.
When sellers are absent, prices generally rise to draw new sellers.
On further strength, the 4,000 mark remains within striking distance, though targets technically project to the 4,100 and 4,175 areas.
Beyond specific levels, the S&P 500’s intermediate-term bias remains comfortably bullish.
Thursday’s Watch List
The charts below detail names that are technically well positioned. These are radar screen names — sectors or stocks poised to move in the near term. For the original comments on the stocks below, see The Technical Indicator Library.
Drilling down further, the 10-year Treasury note yield
continues to take flight, knifing to 13-month highs.
In the process, the yield has nearly doubled year-to-date — across just 11 weeks — rising 85 basis points from the Jan. low (0.90).
Fundamentally, the yield’s surge to the 1.75 mark has registered despite dovish Federal Reserve policy remarks Wednesday. Concerns that an already-recovering economy may overheat, amid a pending round of additional fiscal stimulus, have contributed to the yield’s latest surge.
Technically, the yield has placed distance atop its breakdown point, a level matching the 2016 low (1.34). Recall that the sub-1.34 area marks the “pandemic zone,” territory that may never be revisited. (See the March 5 review.)
A more distant inflection point at the 2017 low (2.03) is increasingly within view.
More broadly, the prevailing follow-through confirms the yield’s late-2020 trend shift,detailed previously. (See the Dec. 3 review and Jan. 6 review.)
Moving to specific names, Nasdaq, Inc.
is a large-cap name showing signs of life.
Earlier this month, the shares knifed to the range top, rising to challenge record territory.
The shares have since held tightly to resistance — consolidating amid decreased volume — improving the chances of eventual follow-through. Tactically, a breakout attempt is in play barring a violation of near-term support, circa 142.30.
D.R. Horton, Inc.
is a well positioned large-cap homebuilder.
Technically, the shares have knifed to record highs, clearing resistance matching the February peak. An intermediate-term target projects to the 91 area.
Conversely, the breakout point (83.50) is followed by the ascending 50-day moving average, a recent bull-bear inflection point. A posture atop this area signals a bullish bias.
XPO Logistics, Inc.
is a large-cap trucking and logistics name.
As illustrated, the shares have broken from a two-month range, rising to challenge record territory. Tactically, a breakout attempt is in play barring a violation of the former range top (124.50).
More broadly, the shares are well positioned on the five-year chart, rising from a continuation pattern hinged to the steep late-2020 rally.
(On a granular note, see the tight December range, and subsequently wider 2021 range, which has broadened in effectively equidistant form. The bullish continuation patterns are hinged to the steep November rally.)
Finally, Viper Energy Partners
is a well positioned mid-cap oil and gas name. (Yield = 3.2%.)
Technically, the shares have rallied to the range top, rising to challenge 52-week highs.
The initial upturn was fueled by a volume spike, and the shares have since held tightly to the range top, improving the chances of an eventual breakout. An intermediate-term target projects to the 19.50 area on follow-through.
More broadly, the shares are well positioned on the three-year chart, traversing still less-charted territory under the 2020 breakdown point (21.00).
Still well positioned
The table below includes names recently profiled in The Technical Indicator that remain well positioned. For the original comments, see The Technical Indicator Library.
|Company||Symbol* (Click symbol for chart.)||Date Profiled|
|Facebook, Inc.||FB||Mar. 17|
|Silicon Motion Technology Corp.||SIMO||Mar. 17|
|AutoNation, Inc.||AN||Mar. 17|
|McDonald’s Corp.||MCD||Mar. 16|
|Virtu Financial, Inc.||VIRT||Mar. 16|
|Spirit Airlines, Inc.||SAVE||Mar. 16|
|LKQ Corp.||LKQ||Mar. 15|
|Nordstrom, Inc.||JWN||Mar. 15|
|Anthem, Inc.||ANTM||Mar. 15|
|Walgreens Boots Alliance, Inc.||W(BA)||Mar. 12|
|International Paper Co.||IP||Mar. 12|
|APA Corp.||APA||Mar. 12|
|iShares Europe ETF||IEV||Mar. 11|
|CME Group, Inc.||CME||Mar. 11|
|Westlake Chemical Corp.||WLK||Mar. 11|
|3M Co.||MMM||Mar. 11|
|Southwest Airlines Co.||LUV||Mar. 10|
|Century Aluminum Co.||CENX||Mar. 10|
|Packaging Corp. of America||PKG||Mar. 10|
|MagnaChip Semiconductor Corp.||MX||Mar. 10|
|Under Armour, Inc.||UA||Mar. 9|
|Visa, Inc.||V||Mar. 9|
|Big Lots, Inc.||BIG||Mar. 9|
|Alaska Air Group, Inc.||ALK||Mar. 9|
|State Street Corp.||STT||Mar. 8|
|American Eagle Outfitters, Inc.||AEO||Mar. 8|
|Hess Corp.||HES||Mar. 3|
|Alcoa Corp.||AA||Mar. 3|
|Beazer Homes USA, Inc.||BZH||Mar. 3|
|EchoStar Corp.||SATS||Mar. 3|
|Mastercard, Inc.||MA||Mar. 2|
|Boeing Co.||(BA)||Mar. 2|
|Starbucks Corp.||SBUX||Mar. 1|
|Oceaneering International, Inc.||OII||Mar. 1|
|Eaton Corp.||ETN||Feb. 25|
|Oracle Corp.||ORCL||Feb. 24|
|United Airlines Holdings, Inc.||UAL||Feb. 24|
|Nucor Corp.||NUE||Feb. 23|
|Signet Jewelers Limited||SIG||Feb. 23|
|Old Dominion Freight Line||ODFL||Feb. 22|
|Seagate Technology||STX||Feb. 19|
|Canada Goose Holdings, Inc.||GOOS||Feb. 19|
|Chevron Corp.||CVX||Feb. 18|
|Lyft, Inc.||LYFT||Feb. 16|
|Intel Corp.||INTC||Feb. 12|
|Helmerich & Payne, Inc.||HP||Feb. 11|
|U.S. Global Jets ETF||JETS||Feb. 9|
|Motorola Solutions, Inc.||MSI||Feb. 9|
|Diamondback Energy, Inc.||FANG||Feb. 4|
|Wix.com, Ltd.||WIX||Feb. 3|
|CarMax, Inc.||KMX||Feb. 3|
|Toll Brothers, Inc.||TOL||Feb. 2|
|Eagle Materials, Inc.||EXP||Feb. 2|
|Avis Budget Group, Inc.||CAR||Feb. 1|
|Capital One Financial Corp.||COF||Jan. 29|
|Aptiv, plc||APTV||Jan. 29|
|Cummins, Inc.||CMI||Jan. 25|
|Magna International, Inc.||MGA||Jan. 22|
|M.D.C. Holdings, Inc.||MDC||Jan. 22|
|Zebra Technologies Corp.||ZBRA||Jan. 14|
|Macy’s, Inc.||M||Jan. 11|
|Nexstar Media Group, Inc.||NXST||Jan. 11|
|iShares Transportation Average ETF||IYT||Jan. 11|
|Energy Select Sector SPDR||XLE||Jan. 8|
|Skyworks Solutions, Inc.||SWKS||Jan. 7|
|Financial Select Sector SPDR||XLF||Jan. 7|
|Synaptics, Inc.||SYNA||Jan. 4|
|JPMorgan Chase & Co.||JPM||Dec. 22|
|Calix, Inc.||CALX||Dec. 17|
|Tenet Healthcare Corp.||THC||Dec. 16|
|Williams-Sonoma, Inc.||WSM||Dec. 15|
|SDPR S&P Regional Banking ETF||KRE||Dec. 14|
|Etsy, Inc.||ETSY||Dec. 14|
|Emerson Electric Co.||EMR||Dec. 8|
|Fortinet, Inc.||FTNT||Dec. 7|
|Kulicke and Soffa Industries, Inc.||KLIC||Dec. 7|
|Dillard’s, Inc.||DDS||Dec. 4|
|Valero Energy Corp.||VLO||Dec. 3|
|Sonos, Inc.||SONO||Dec. 1|
|American Airlines Group, Inc.||(AAL)||Nov. 30|
|Zillow Group, Inc.||ZG||Nov. 23|
|Bank of America Corp.||(BA)C||Nov. 20|
|SPDR S&P Oil & Gas Exploration and Production ETF||XOP||Nov. 20|
|MetLife, Inc.||MET||Nov. 19|
|Kohl’s Corp.||KSS||Nov. 18|
|Applied Materials, Inc.||AMAT||Nov. 17|
|Regions Financial Corp.||RF||Nov. 13|
|Norfolk Southern Corp.||NSC||Nov. 9|
|Communications Services Select Sector SPDR||XLC||Nov. 5|
|Alphabet, Inc.||GOOGL||Nov. 5|
|The Travelers Companies, Inc.||TRV||Oct. 21|
|Micron Technology, Inc.||MU||Oct. 20|
|Vulcan Materials Co.||VMC||Oct. 19|
|ON Semiconductor Corp.||ON||Oct. 16|
|Ford Motor Co.||F||Oct. 15|
|SPDR S&P Homebuilders ETF||XHB||Oct. 9|
|Shake Shack, Inc.||SHAK||Oct. 9|
|Martin Marietta Materials, Inc.||MLM||Sept. 30|
|Abercrombie & Fitch Co.||ANF||Sept. 29|
|Scientific Games Corp.||SGMS||Sept. 23|
|Crocs, Inc.||CROX||Sept. 14|
|Five Below, Inc.||FIVE||Sept. 10|
|Eastman Chemical Co.||EMN||Sept. 10|
|Deere & Co.||DE||Aug. 24|
|Johnson Controls International||JCI||Aug. 21|
|General Motors Co.||GM||Aug. 20|
|Builders FirstSource, Inc.||BLDR||Aug. 18|
|Freeport McMoRan, Inc.||FCX||Aug. 10|
|Industrial Select Sector SPDR||XLI||Aug. 6|
|Penn National Gaming, Inc.||PENN||July 30|
|SPDR S&P Metals & Mining ETF||XME||July 28|
|iShares MSCI South Korea ETF||EWY||July 28|
|Materials Select Sector SPDR||XLB||July 20|
|Caterpillar, Inc.||CAT||July 20|
|Roku, Inc.||ROKU||July 16|
|SPDR S&P Retail ETF||XRT||June 3|
|iShares MSCI Japan ETF||EWJ||May 29|
|Tesla, Inc.||(TSLA)||Apr. 23|
|Apple, Inc.||AAPL||Mar. 27|
|iShares MSCI Emerging Markets ETF||EEM||Mar. 19|
|Microsoft Corp.||(MSFT)||Feb. 22|
|* Click each symbol for current chart.|