EB Daily Market Report - Thursday, March 28, 2024

Tom Bowley - March 28, 2024

Executive Market Summary

Futures were a bit mixed overnight and they were still mixed at the opening bell
With an hour left in the trading session, our major indices are fractionally higher, with the exception of the NASDAQ, which is down fractionally
The small cap Russell 2000 (IWM, +0.47%) made a significant breakout yesterday, closing above 208.21 resistance and is tacking on more gains today, leading other indices on an absolute and relative basis
Cryptocurrencies are wrapping up March in bullish style as bitcoin ($BTCUSD, +2.91%) rises 2000 to clear the 70,000 level
It's been a big month for many commodities and that area is closing out March strong; gold ($GOLD) is up 1.28% today and crude oil prices ($WTIC, +2.07%) have spiked back above $83 per barrel
The 10-year treasury yield ($TNX) is up 1 basis point to 4.21%
Energy (XLE, +1.09%) has led all sectors to the upside in March and it's ending March in similar fashion
Meanwhile, consumer discretionary (XLY, -0.15%) and technology (XLK, -0.05%) are the only two sectors not participating today
Estee Lauder (EL, +6.21%) is leading all S&P 500 companies after being upgraded by Bank of America

Market Outlook

Here's a quick peek at the long-term monthly charts for our key indices:

Dow Jones ($INDU):

S&P 500 ($SPX):

NASDAQ 100 ($NDX):

Russell 2000 (IWM):

Transportation ($TRAN):

The up channels off of the 2009 financial crisis low and the 2020 pandemic low remain perfectly intact for all 5 key indices above. The long-term outlook remains quite bullish and I think it's always helpful to get away from all of the day-to-day noise and focus on these "bigger picture" charts.

Sector/Industry Focus

I know it's easy to get restless when multi-year leaders take time off to consolidate, but trust me, it's a good thing. Let's take software ($DJUSSW) as an example. It had been climbing rather steadily, but for the past 6 weeks or so, we've not seen a single new high. The good news, however, is that software is consolidating in a bullish continuation pattern:

The bottom panel shows the AD line marching higher over the past month, despite sideways price action. The DJUSSW does have maybe another 1% or so to the downside possible if it retests that lower up channel line in this pattern. Otherwise, I see another breakout coming.

ChartLists/Strategies

If you like small stocks, this might appeal to you. National CineMedia (NCMI) has pulled back roughly 13-14% over the past week or so to test key gap support from when NCMI raised its guidance. Check out the chart:

I'm expecting to see NCMI reverse from here, but there's a chance it tests 4.75, the low the day of the raised guidance. Anything below 4.75 and I'd be out.

Earnings Reports

Here are the key earnings reports for the next two days, featuring stocks with market caps of more than $10 billion. I also include notable companies with market caps below $10 billion. Finally, any portfolio stocks that will be reporting results are highlighted in BOLD. If you decide to hold a stock into earnings, please understand the significant short-term risk that you are taking. Please be sure to check for earnings dates for any companies that you own or are considering owning.

Thursday, March 28:

WBA, MSM, SMTC

Monday, April 1:

PVH

Economic Reports

Q4 GDP: +3.4% (actual) vs. +3.2% (estimate)

Q4 PCE: +3.3% (actual) vs. +3.0% (estimate)

Initial jobless claims: 210,000 (actual) vs. 213,000 (estimate)

March Chicago PMI: 41.4 (actual) vs. 46.0 (estimate)

March consumer sentiment: 79.4 (actual) vs. 76.5 (estimate)

February pending home sales: +1.6% (actual) vs. +1.3% (estimate)

Happy trading!

Tom