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Three Troubling Charts For Bullish Traders

By Jeff Clark
Tuesday, April 9, 2013

 The S&P 500 is within spitting distance of making a new all-time high.
 
Even so, several sectors have already entered confirmed downtrends by falling below their 50-day moving averages (DMA), a common measure of trends. And other sectors are barely holding onto support.
 
Here's a look at a few of them...
 
 First is the banking sector...
 
Philidelphia Bank Index value, January 2012 - Present
 
The banking index often leads the stock market. So its breakdown below the 50-DMA should be concerning to the bulls. You can see on the chart what happened when the index dropped below the 50-DMA at about this same time last year. If the banking index can't rally back above the line over the next day or two, we could see a fairly sharp selloff in the financial sector.
 
 Semiconductors look even more troubling...
 
Philadelphia Semiconductor Index value, January 2012 - Present
 
The SOX fell about 3% below its 50-DMA last week, and the bounce back toward the line so far has been pathetic. The sector looks weak. If it plays out the same script as last year, it would give up all this year's gains over the next couple months.
 
 Finally, here's a look at the transportation sector...
 
Dow Jones Transportation Average, Index Value, January 2012 - Present
 
Transportation stocks have been among the best performers so far this year. The Dow Jones Transportation Average hasn't broken its 50-DMA yet... But it's close to doing so. If transportation stocks decline even further this week and join the other sectors in confirmed downtrends, it will be tough for the S&P 500 to hold up much longer.
 
Best regards and good trading,
 
Jeff Clark




Further Reading:

Last week, Jeff told readers to keep their eyes on some extreme conditions setting up in three commodities, including one that doubles as a leading indicator for stock prices. Get the details here: A Few Things to Watch in the Commodities Market This Week...
 
Brian Hunt says one "boom and bust" industry is in "bust" mode... But if the economy holds together, these stocks will bottom and they "will double and triple in a matter of months, not years." Read more here.

In The Daily Crux
Market Notes
"World Dominator" Wal-Mart is sitting less than 1% off an all-time high.
 
Natural gas infrastructure companies Cheniere Energy and Chicago Bridge & Iron soar 50%-plus over the past six months.
 
Utility uptrend keeps rolling... sector fund XLU breaks out to a new four-year high.
 
Small-cap private-equity company KKR rockets 38% over the past four months.
Market Watch
Symbol Price
Change
52-Wk
S&P 500 1563.07 +0.6% +11.8%
Oil (USO) 33.49 +0.6% -14.7%
Gold (GLD) 152.16 -0.4% -3.9%
Silver (SLV) 26.32 -0.3% -14.3%
U.S. Dollar 82.76 +0.2% +3.4%
Euro 1.30 +0.0% -0.7%
Volatility (^VIX) 13.19 -5.2% -21.0%
Gold Stocks (^HUI) 324.18 -1.2% -26.5%
10-Year Yield 1.73 +2.4% -20.3%

World ETFs
Symbol Price
Change
52-Wk
Japan (EWJ) 11.07 +1.0% +14.9%
USA (SPY) 156.21 +0.7% +14.2%
Singapore (EWS) 13.82 -0.5% +13.7%
Israel (ISL) 14.28 +0.2% +7.6%
India (IFN) 20.59 +0.5% +3.2%
Taiwan (EWT) 13.04 -1.8% +2.5%
Canada (EWC) 27.54 +0.0% +1.6%
China (FXI) 35.63 0.0% -1.1%
S. Africa (EZA) 63.61 +1.9% -1.5%
Lat.America (ILF) 42.99 +0.1% -5.7%
S. Korea (EWY) 55.48 -0.5% -7.5%
Russia (TRF) 14.49 -0.1% -10.0%

Sector ETFs
Symbol Price
Change
52-Wk
Construction (PKB) 19.71 +1.4% +43.6%
Media (PBS) 19.25 +0.5% +30.3%
Health Care (IYH) 97.17 +0.2% +26.4%
Consumer Svcs (IYC) 98.18 +1.0% +23.5%
Real Estate (IYR) 71.38 +0.9% +20.5%
Financials (IYF) 67.95 +1.1% +19.7%
Water (PHO) 22.41 +0.7% +19.6%
Utilities (XLU) 39.87 +0.8% +18.9%
Insurance (PIC) 19.01 +0.1% +18.3%
Defense (PPA) 22.84 +0.4% +17.6%
Telecom (IYZ) 25.03 +1.3% +16.6%
Transportation (IYT) 108.34 +0.9% +16.4%
Biotech (PBE) 26.20 +0.7% +16.0%
Industrials (IYJ) 80.35 +0.6% +15.8%
Retail (PMR) 27.84 +1.8% +11.0%
Software (PSJ) 29.00 -0.2% +8.6%
Nanotech (PXN) 6.49 +0.2% +3.1%
Big Tech (QQQQ) 68.22 +0.5% +2.1%
Basic Mat (IYM) 68.35 +0.5% +1.0%
Semis (PSI) 14.99 +1.0% -3.4%
Alt. Energy (PBW) 4.25 +1.2% -16.2%

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