26 April 2016 – Waiting for Apple earnings, Market is sideway

It was a mixed market for the indices with Dow Transportation and Russell 2000 having a good day. Healthcare was a disappointment and that pulled the Nasdaq 100 lower. Dow Industrial and S&P 500 were undecided.

Investors remain cautious ahead of key policy meetings from the FOMC (results tomorrow) and the Bank of Japan (Thursday), as major averages remain only a few percentage points away from all-time highs reached in the summer of last year. Leaders again today for S&P were energy, industrials and materials. Defensive staples, healthcare and telecom lagged.

Oil prices closed higher by more than 3% as commodities benefited from a pullback in the dollar following weaker economic data. Bonds continued its drop.

Dow Transportation was indecisive in the first hour of trading with swing up and down. It reversed and traded upward for the rest of the day and closed with a bullish candle above its 8EMA. Pivot momentum remains upward. Daily volumetric buying pressure is at 100%.

Dow Industrial had a quick upmove in the first half hour of trading and then pulled back and range traded for the rest of the day and closed with a doji candle above its 8 EMA. Pivot momentum remains upward. Short term volumetric buying pressure is at 100%.

Russell 2000 swung wildly up and down before breakout upward in the first two hours of trading. It traded upward for the rest of the day and closed with a bullish Marubozu candle above its 8EMA. Pivot momentum remains upward. Volumetric buying pressure is at 100%.

Nasdaq 100 made small gains in the first half hour of trading before selling off for the rest of the day. It closed with a bearish Marubozu candle below its 21 EMA. Pivot momentum has reversed downward. Volumetric buying pressure is at 42.5%. The Nasdaq 100 is in a monthly Squeeze.

S&P 500 traded upward in the first half hour after market open and then pulled back. It subsequently range traded for the rest of the day and closed with a doji candle above its 8EMA. Pivot momentum remains upward. Volumetric buying pressure is at 95.1%. The S&P 500 is in a daily and monthly Squeeze.

Commodities
Oil (/CL) futures is at $44.54 per barrel. Gold (/GC) futures is at 1245.7 an ounce. Silver (/SI) futures closed at 17.235. Commodities (DBC) ETF closed up at 14.23 at its 200 SMA. Agriculture (DBA) ETF closed up 21.06 above its 200 SMA.

Bonds
Junk bonds ETF (HYG) closed up 83.36 and sits on its 200 SMA. Bonds ETF (TLT) is at 127.25.

Currencies
USD/JPY is at 111.22. EUR/USD closed at 1.1300 and is in a Squeeze. The dollar index (/DX) is at 94.460 and is in a Squeeze.

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

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

Market Internals
Vix is up at 13.96. Vix futures is at 16.19. Volatility is still low. Skew is at 127.40. Market sentiment is rather bullish. Market breadth is flat. Volumetric accumulation/distribution shows it making gains.

The Week Ahead
The market is sending mix signals. The leading indices such as the Dow Transportation and Russell 2000 are showing enthusiasm for breaking upward. Nasdaq 100 is being pummeled while the Dow Industrial and S&P 500 are undecided. Market internal remains resilient.

The prognosis is that we are in a mix market in the middle of the earnings season.

To YOUR wealth!