We are seeing some strong conditions in the market right now. Even at extremely overbought levels, Wednesday’s session showed a market that was only slightly negative most of the day and then saw a rally in the closing minutes to push both indexes positive. The S&P 500 gained 0.41% and the NASDAQ 0.29%. The Fed’s Beige Book released Wednesday said that economic activity increased in most regions. Consumer spending rose in most districts. The ADP employment report showed U.S. private employers added a more-than-expected 214,000 jobs in February.
Here are the longer term charts for the indexes which help to showcase our blue trendlines better and why moving above them yesterday is a positive. One can also see how the “double top” in the NASDAQ late in 2015 was a great signal to get bearish while the “double bottom” in the S&P 500 a few weeks back was a great signal to get bullish. Of course this is always easier to say in retrospect!
As mentioned yesterday we are in “almost never seen” rarefied air in terms of the NYSE McClellan Oscillator. It’s rare to see >+65, forget >+90.
Oil continues to act constructive. A move to the $37s area where there was a lot of action back in December could be ahead of us.
The emerging markets ETF (EEM) also has had a nice breakout here.
Monsanto (MON) dropped 7.8% after the agricultural products company slashed its full year profit outlook, citing a deteriorating macro environment.
In one of the more morbid stories I’ve seen in a while Chesapeake Energy (CHK) shot up 23% to $3.40 after the oil and gas company’s former chief executive officer, Aubrey McClendon, was indicted Tuesday on charges of conspiring to rig bids for the purchase of oil and natural gas leases. On Wednesday, McClendon was found dead in a car crash.
Abercrombie & Fitch (ANF) shares jumped 4.4% after the retailer reported its first same-store sales gain in more than three years as profit soared 33% in the most recent quarter. In light of the market the past 3 months this is one of the nicest charts out there.
We might be starting to see some signs of life in the “resource” stocks after many many many false starts.