Tuesday was another quiet holiday week session with mild gains to start the day followed by light selling to end the day. The S&P 500 gained 0.07% and the NASDAQ fell 0.02%. There is a private employment report via ADP reported each month ahead of the government data – that came out today well over expectation at 281,000 new positions.
Here are longer term charts for the two indexes; we are a bit stretched on both after yesterday’s gains as both indexes are well above even the 10 day moving average. If the NASDAQ continues to rally in the coming month we’ll see if this major trendline that served as a key support throughout 2013 and early 2014 (in purple) turns into resistance.
Here is the NYSE McClellan Oscillator – usually we show it more often but it has not been at any extreme for a few months; most of the action has been the NASDAQ Oscillator.
The good economic news seemed to be liked by the bond market as we saw yields on the 10 year bond rally back over 2.6%. There was a period there where yields had broken a key support level (top blue line) and threatened to break an even more important support (lower blue line) but we seem to have come back from the abyss.
This rally in rates hurt the utilities which have emerged as a hiding place for investors stretching to find any yield in lieu of low rates in bonds.
The emerging market ETF continues to do well (EEM). We highlighted this one in late March after it broke a very long downtrend and while volatile it has done nothing wrong since. Generally we’ve seen rallies of 3-4 weeks, shallow pullbacks of a similar length, then rallies, and repeat.
Biotechs continue their resurgence – Gilead Sciences (GILD) is among the largest and has taken off this week:
We’ll finish today with another look at the wild and crazy GoPro (GPRO) which took back a large chunk of yesterday’s 20% gain. This recent IPO has been a heck of a trading stock for those with short term time frames – once it settles down it will be an interesting one to keep on the radar.