Markets Steady But Seeking A Spark

Posted: Apr 19, 2021 1:42 PM
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Markets Steady But Seeking A Spark

Source: AP Photo/Richard Drew, File

It was an interesting week that saw stronger performances in cautious sectors like Utilities and Materials, even as growth continued its comeback.

I think this trend continues as earnings are delivered and analyzed.  The good news is earnings are expected to soar.

The bad news is earnings are expected to soar.

While the broadening of the rally is encouraging, market breadth in general has been unimpressive.  But the market starts the week at an all-time high.  I suspect there will be more rotation to old-school blue-chip names rather than money seeking the sidelines.

S&P 500 Index



Communication Services XLC



Consumer Discretionary XLY



Consumer Staples XLP



Energy XLE



Financials XLF



Health Care XLV



Industrials XLI



Materials XLB



Real Estate XLRE



Technology XLK



Utilities XLU



Market Breadth (Week)

The shift towards blue chip names was evident in the weekly breadth metrics that saw a solid spread between advancers and decliners and new highs to new lows.  But the NASDAQ saw more decliners and a surge in new lows.  The index has gone from throwing darts to hit or miss.

Market Breadth









52 Week High



52 Week Low



Up Volume

10.5 billion

9.3 billion

Down Volume

8.8 billion

11.8 billion

Technical View

The best performing index has been the Russell 2000, which has struggled of late.  Right now, the index is in a head and shoulders formation, and that is typically bearish.  The index is a great proxy for the US economy and up and coming companies.  I think there is a little short term overbought condition and a little reaction to stumbles with the vaccine.

Portfolio Approach

We added to Industrials on Friday in the Hotline Model Portfolio.

Today’s Session

The biggest earnings and economic data begin tomorrow after the close with Netflix (NFLX). 

The market has been steady but clearly needs a spark.