18 April 2016 – Pullback in oil and bulls on the run

Oil pullback in world market due to the lack of agreement in Doha but that did not stop the bulls from running up the indices. Dow Industrial has now breached the 18,000 level for the first time since July 2015. The S&P 500 is now within a short striking distance of 2,100.

We are now in the earnings season and the market will take its next cue from it. Gold was flat for the day and the US dollar index traded down which was good for the US exporters.

Dow Transportation gapped down on market open and reversed sharply upward for the first hour and made its day’s high. It then range traded for the rest of the day and closed with a spinning top doji candle. Pivot momentum remains upward. Daily volumetric buying pressure is at 73.9%.

Dow Industrial gapped down on market open and reversed sharply upward. It retained its upward momentum throughout the day and closed with a bullish Marubozu candle above its 3EMA. Pivot momentum remains upward. Short term volumetric buying pressure is at 100%.

Russell 2000 gapped down on market open but reversed direction and rocketed upward. It continued trading upwards throughout the day and closed above its 200 SMA with a bullish Marubozu candle. Pivot momentum is upward. Volumetric buying pressure is at 100%.

Nasdaq 100 had a big gap down on market open and reversed sharply upward for the first two hours. It then range traded for the rest of the day and closed with a bullish candle. Pivot momentum remains upward. Volumetric buying pressure is at 100%. The Nasdaq 100 is in a monthly Squeeze.

S&P 500 had a big gap down on market open and reversed sharply upward. It closed with a bullish Marubozu candle above its 3EMA. Pivot momentum remains upward. Volumetric buying pressure is at 100%. The S&P 500 is in a daily and monthly Squeeze.

Commodities
Oil (/CL) futures closed at $41.42 per barrel. Gold (/GC) futures closed at 1233.1 an ounce. Silver (/SI) futures is at 16.22. Commodities (DBC) ETF closed up at 13.62. Agriculture (DBA) ETF is at 20.66.

Bonds
Junk bonds ETF (HYG) broke upwards at 82.96. Bonds ETF (TLT) lost and closed at 131.31.

Currencies
USD/JPY traded up at 108.84. EUR/USD is at 1.1309. The dollar index (/DX) is at 94.455.

Relative Strength – Sectors
On a monthly lookback, the ETFs outperforming the S&P 500 are XLE, XLV, XLF, XLB and XLY respectively. Energy and Healthcare retains the lead.

On a 3-month lookback, the relative strength order are XLE, XLB, XLI, XLY, XLF and XLK respectively.

Market Internals
Vix is down at 13.35. Vix futures is at 13.85. Skew is at 120.55. Market sentiment remains bullish. Market breadth is flat. Volumetric accumulation/distribution is sloping up.

The Week Ahead
This market closed last week undecided but today’s trading tells us that the market remains bullish. The energy and healthcare sector continue to perform well. The volatility compression monthly Squeezes in the Dow Industrial, Nasdaq 100 and S&P 500 could be indicative of bigger moves ahead. The monthly Squeeze on the Russell 2000 has fired long.

To YOUR wealth!