28 July 2016 – A quiet day

US stock indices had a fairly quiet day post FOMC meeting. The focus is on the BoJ central bank decision with anticipation of more stimulus. Technology stocks continue to outperform and the Nasdaq 100 the other indices. Worse performing are the Dow Jones Transportation stocks and index. The S&P 500 has been moving sideways for the past two weeks.

Gold surged and oil continues to fall and is trading below $41 per barrel. The dollar index and bonds are sideways.

Dow Transportation traded upward in the first half hour and remain range bound within a rather small range throughout the day. It closed with a small spinning top doji candle above its 21 EMA. Momentum remains upward. Daily volumetric buying pressure is at 96.8%. The index is in a weekly Squeeze.

Dow Industrial probed for the bottom in the first two hours after market open before reversing upward. It traded upward till the end of the day to close with a high closing doji candle just below its 8 EMA. Momentum remains upward. Short term volumetric buying pressure is at 99%. The index is in a monthly Squeeze.

Russell 2000 traded downward till mid-morning before reversing upward for the rest of the day. It closed with small doji candle on its 3 EMA. Momentum remains upward. Volumetric buying pressure is at 95.5%. The index is in a monthly Squeeze.

Nasdaq 100 traded sideways for the first half of the day before surging upward to new yearly high at 4725.78. It closed with a bullish candle above its 3 EMA. Momentum remains upward. Volumetric buying pressure is at 99.7%. The index is in a monthly Squeeze.

S&P 500 probed for its bottom by mid-morning before reversing upward for the rest of the day. It closed with a spinning top doji candle on its 3 EMA. Momentum remains upward. Volumetric buying pressure is at 99.9%. The index is still in a monthly Squeeze.

Metals and Commodities
Oil (/CL) futures continues its downtrend and is trading at $41.08 per barrel. Gold (/GC) futures is trading at $1344.8 per ounce. Silver (/SI) futures is trading at 20.280 per ounce.

Agriculture (DBA) ETF continued its downtrend and closed at 20.46. Commodities (DBC) ETF continues its downtrend and closed at 14.16.

Bonds
High Yield bond ETF (HYG) closed down at 85.33. Bonds ETF (TLT) is trading sideways at 140.39.

Currencies
The dollar index is sideways at 96.530. EUR/USD is at 1.1078. USD/JPY traded sideways at 104.372.

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

On a 3-month lookback, the relative strength order are XLK, XLF, XLB, XLI, XLV, XLY and XLU are outperforming the S&P 500.

Market Internals
Vix is at 12.72. Vix futures is at 14.45. Skew is at 128.51. Market sentiment is very bullish. Market breadth has flattened. Volumetric accumulation/distribution has flattened as well.

The Week Ahead
Market internals show that there is no fear in the market and the market remains strong. The Nasdaq 100 continues to power to new yearly high on solid performance by tech companies such as Apple and Facebook. The prognosis is for the upward momentum to continue.

Stock of the Day
Facebook continues to outperform in its latest earnings report. Betting on Facebook is akin to betting on a young Mark Zuckerberg. This is a repeat of betting on Steve Jobs when he was starting out in Silicon Valley with Apple. It is just a matter of time before Facebook becomes the most valuable company in the US market.

To YOUR wealth!