Macro Market · Market Commentary · Newsletter

Daily Commentary – You Know the Drill

It’s the C word again as we chopped back and forth, starting from deep in the red before recovering intraday. Though few key divergences stood out today. Firstly, the Dow outperformed notably and closed green despite others in the red, and charged right at the descending trendline again.

20161027-INDU.png

It is impressive considering the Nasdaq closed down -0.6% on the heels of poorly received AAPL earnings, and especially comparing to the Russell 2000 which was down 1% on its own. “Boeing, which contributed nearly 45 points to the index after the aircraft maker raised its full-year guidance” was to be thanked for Dow’s strength

http://www.wsj.com/articles/european-stocks-slip-in-early-trading-1477467591

Tesla (TSLA) was the spotlight after-hours, blowing out expectations with a surprise $22m profit and reacted with $10 gain in AH trading.

http://www.wsj.com/articles/tesla-posts-second-profitable-quarter-ever-1477513454

Back to Russell 2000 (IWM), it is a worrying sign for the bulls as it tumbled under a 3-month bullish channel, and points to eventual test of breakout horizontal support of 117.5. The ratio between IWM and SPY, a measure of relative performance, is also on verge of dropping below LT bullish channel, suggesting further underperformance in small caps vs. large caps in coming days.

20161027-iwm

20161027-iwmspy

The other notable laggard sector was REITs (IYR) which dropped -1.2% and diverged significantly from its other rate-sensitive counterpart Utilities, which was actually up 0.25%. The IYR now appears to be forming a large bearish H&S pattern with its neckline around 76 area.

20161027-IYR.png

Treasury bond yields were higher with TLT dropping once again below the 200DMA and with a H&S pattern appearing to form, its chart pattern looks reminiscent of the IYR.

20161027-TLT.png

As we anticipated, the QQQ came back to fill the gap just above 20DMA and closed just slightly above it. Now all eyes on earnings from tech giant duo AMZN and GOOGL, which combine for about 7.5% of the Nasdaq 100 index. Could be a potential make or break in QQQ’s continued levitation.

20161027-QQQ.png

 

 

Daily Market Snapshot

Sector ETFs by Daily Return %

SYMBOL NAME CLOSE DAILY (%) WTD % MTD %
KRE SPDR KBW Regional Banking ETF 43.7  

0.32

0.73%

1.18% 3.38%
XLFS S&P SmallCap Financials Portfolio 31.23  

0.2

0.64%

0.71% 2.56%
XLF SPDR Select Sector Fund – Financial 19.81  

0.12

0.61%

0.81% 2.64%
XLI SPDR Select Sector Fund – Industrial 57.15  

0.2

0.35%

0.28% -2.11%
XLU SPDR Select Sector Fund – Utilities 48.6  

0.12

0.25%

1.25% -0.80%
XLE SPDR Select Sector Fund – Energy Select Sector 69.82  

0.16

0.23%

-0.53% -1.12%
DIA Dow Jones Industrial Average ETF 181.77  

0.29

0.16%

0.30% -0.55%
IBB iShares Nasdaq Biotechnology 265.31  

0.13

0.05%

-0.92% -8.34%
XLP SPDR Select Sector Fund – Consumer Staples 52.69  

-0.07

-0.13%

0.88% -0.98%
XLB Materials Select Sector SPDR 46.67  

-0.07

-0.15%

-0.83% -2.26%
SPY SPDR S&P 500 213.74  

-0.43

-0.20%

-0.11% -1.18%
XLG Rydex Russell Top 50 ETF 151.44  

-0.43

-0.28%

0.20% -0.87%
SMH HOLDRS Merrill Lynch Semiconductor 68.38  

-0.2

-0.29%

0.71% -1.57%
PFF iShares S&P US Preferred Stock Fund 39.33  

-0.12

-0.30%

-0.08% -0.43%
XRT SPDR S&P Retail ETF 42.73  

-0.15

-0.35%

-0.51% -1.88%
XLY SPDR Select Sector Fund – Consumer Discretionary 78.88  

-0.34

-0.43%

-0.89% -1.45%
XLK SPDR Select Sector Fund – Technology 47.55  

-0.27

-0.57%

0.04% -0.48%
XLV SPDR Select Sector Fund – Health Care 68.96  

-0.42

-0.61%

-1.08% -4.37%
QQQ PowerShares QQQ Trust 118.38  

-0.81

-0.68%

0.19% -0.29%
IWM iShares Russell 2000 119.73  

-1.2

-1%

-1.11% -3.61%
IYR iShares Dow Jones U.S. Real Estate Index Fund 77.14  

-0.91

-1.17%

-1.09% -4.34%

 

Commodity & Bond ETFs

SYMBOL NAME CLOSE DAILY  (%) WTD % MTD %
DBA PowerShares DB Agriculture Fund 20.62  

0.04

0.19%

1.68% 3.20%
AGG iShares Barclays Aggregate Bond Fund 111.44  

-0.22

-0.20%

-0.35% -0.87%
HYG iShares iBoxx $ HY Corp Bond Fund 87.02  

-0.35

-0.40%

-0.40% -0.28%
LQD iBoxx $ Investment Grade Corporate Bond Fund 121.56  

-0.51

-0.42%

-0.78% -1.32%
GLD SPDR Gold Trust 120.79  

-0.68

-0.56%

-0.03% -3.86%
TLT iShares Barclays 20 Year Treasury Bond Fund 132.18  

-0.9

-0.68%

-0.85% -3.70%
SLV iShares Silver Trust 16.71  

-0.15

-0.89%

0.36% -8.19%
USO United States Oil Fund 11.09  

-0.15

-1.34%

-3.40% 1.46%
GDX Market Vectors TR Gold Miners 24.13  

-0.52

-2.13%

-1.99% -8.70%

Country ETFs

SYMBOL NAME CLOSE DAILY (%) WTD % MTD %
EWI iShares MSCI Italy Index Fund 11.27  

0.02

0.18%

0.54% 2.27%
DXJ WisdomTree Japan Total Dividend Fund 44.75  

0.05

0.11%

0.49% 4.29%
EWP iShares MSCI Spain Index Fund 27.18  

-0.02

-0.07%

0.44% 1.34%
EWO iShares MSCI Austria Index Fund 16.52  

-0.02

-0.12%

1.41% 1.23%
EWM iShares MSCI Malaysia Index Fund 8.09  

-0.01

-0.12%

0.50% -0.25%
EWJ iShares MSCI Japan Index Fund 12.58  

-0.02

-0.16%

0.08% 0.32%
EWH iShares MSCI Hong Kong Index Fund 21.95  

-0.07

-0.32%

0.55% -0.27%
EWC iShares MSCI Canada Index Fund 25.47  

-0.09

-0.35%

-0.89% -0.86%
EWD iShares MSCI Sweden Index Fund 28.03  

-0.1

-0.36%

-1.16% -3.58%
EWQ iShares MSCI France Index Fund 23.83  

-0.09

-0.38%

-0.42% -1.37%
EWL iShares MSCI Switzerland Index Fund 29.03  

-0.11

-0.38%

-1.89% -4.98%
EWG iShares MSCI Germany Index Fund 25.8  

-0.13

-0.50%

-0.15% -1.79%
EWT iShares MSCI Taiwan Index Fund 15.83  

-0.08

-0.50%

0.57% 0.83%
EWU iShares MSCI United Kingdom Index Fund 15.03  

-0.08

-0.53%

-1.18% -5.11%
EWX SPDR S&P Emerging Markets Small Cap ETF 43.38  

-0.25

-0.57%

-0.30% 0.51%
EWN iShares MSCI Netherlands Index Fund 24.38  

-0.18

-0.74%

-0.53% -2.71%
EWZ iShares MSCI Brazil Index Fund 37.84  

-0.35

-0.92%

0.19% 12.18%
EWK iShares MSCI Belgium Index Fund 18.09  

-0.17

-0.94%

-1.42% -4.08%
EWS iShares MSCI Singapore Index Fund 10.4  

-0.1

-0.96%

-0.19% -4.24%
FXI iShares FTSE/Xinhua China 25 Index Fund 37.59  

-0.38

-1.01%

-0.63% -1.10%
EEM iShares MSCI Emerging Index Fund 37.4  

-0.4

-1.06%

-0.53% -0.13%
EWA iShares MSCI Australia Index Fund 20.61  

-0.25

-1.21%

-0.58% -1.39%
EWW iShares MSCI Mexico Index Fund 51.08  

-0.78

-1.52%

-1.67% 5.36%
EWY iShares MSCI South Korea Index Fund 55.58  

-0.91

-1.62%

-1.09% -4.39%

 

 

Week Ahead – Events and Economic Data

10/27 Thursday

Time Event / Data
8:30am Initial Jobless Claims, Durable Goods
10:00am Pending Home Sales
After the close GOOGL, AMZN Earnings

 

10/28 Friday

Time Event / Data
8:30am Q3 GDP (Advance), Employment Cost Index
10:00am Consumer Sentiment

Earning Schedule

20161022-Earnings.png

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