EB Daily Market Report - Brief Update - Thursday, June 27, 2024
New YouTube Show
I'm now doing a new weekly Thursday show at StockCharts.com and my first show was just recorded earlier today. Today's show, "MASSIVE Market Leadership Rotation Happening RIGHT NOW!" can be viewed simply by clicking the link. Please check it out and "Like" the video and "Subscribe" to the StockCharts YouTube channel. As always, we really appreciate your support!
Brief Update
The Volatility Index ($VIX) has been drifting lower and lower and is currently at 12.32. As a follower of EarningsBeats.com, you should know that VIX readings below 13 are historically VERY BULLISH indicators of future stock market action. One of our primary industry group leaders in 2024 is the semiconductor group ($DJUSSC). The DJUSSC is down nearly 10% since the huge gap open last Thursday, yet significant selling in this very influential group has resulted in less than a 1% drop in the S&P 500. This is EXTREMELY important to understand as money is NOT leaving the stock market. Instead, it's simply rotating right now to other groups and that's what keeps bull markets alive and kicking.
Amazon.com (AMZN, +2.36%) is tacking on more gains today after a significant breakout on Wednesday, above the 190 level. AMZN is powering both the broadline retail group ($DJUSRB, +1.39%) and consumer discretionary (XLY, +0.51%) higher. Alphabet (GOOGL, +0.75%) also has broken out, lifting the communications services sector (XLC,+0.50%). The XLC and XLY lead both today's action and the past week's action, offsetting the horror that's been the semiconductors. Tesla (TSLA, +0.50%), though still stuck in an intermediate-term downtrend, is showing significant strides on its short-term chart and absolutely LOVES the pre-earnings period from late-June to mid-July. "Tis the Season" if you're a TSLA fan.
As semiconductors have faded over the past week, check out this list of relative strength leaders among industries to soften the blow:
Autos, internet, and broadline retail are all in the Top 5. Add software in the #9 spot and you can see that other key areas have stepped up as money has rotated away from NVIDIA Corp (NVDA, -2.03%) and friends.
We can't continue to trade what WAS working. We need to realize that, after a 115% move in 8 months, the semiconductor trade is overcrowded and rotation to other areas of the market will create new opportunities. We'll be looking to uncover those opportunities as they present themselves.
Happy trading!
Tom