Investors showed little guidance to move the market. Major indexes sealed the week with slim gains of less than 0.5%. Nasdaq was the exception. It posted a remarkable increase by 1.5%.
The market began on a positive note. S&P 500 and Dow Jones moved to new all-time highs. Nasdaq showed recovery from last week’s dip.
Technology and healthcare stocks continued to lead the bullish run.
The energy sector gave a poor show. Crude oil continued to plunge lower by 3% due to excess supply concerns from the Department of Energy.
Biotechnology stocks kept charging forward. It moved higher by 9%.
Healthcare sector performed well due to a revision in its reform bill. The Senate decided for a gradual expansion of its latest Affordable Care Act's Medicaid. Healthcare took the news in stride, moving higher by 3.5%.
The market was indecisive last week except for Nasdaq which made 1.8% gain due to strong returns from the technology and biotech sector. Overall, Nasdaq continued to show why it is the leader for 2017. With year-to-date gain of 16.4%, it leads the front followed by S&P 500 and Dow Jones. Small-cap index, Russell 2000 is the laggard. But it showed a respectable gain on 4.2%.
Here are the highlights in this sector comparison:
-Biotech sector (XBI/green line) displayed strength amongst its peers.
-Technology sector (XLK/blue line) and healthcare sector (XLV/purple line) gave single-digit positive returns.
-Energy sector (XLE/orange line) moved lower by more than 2% due to reports of excess oil supply.
Here are the daily charts for the 4 market indices.
Nasdaq showed why it is the leader for 2017. After a minor pullback to the 50DMA line, it recovered by bouncing above the support line. There is a strong chance that the recovery will continue next week. This is proven by the strong volume display on last Friday. The volume is the highest since 24th June 2016 (see red arrow). It definitely shows that there is huge activity from the institutional investors. See if it can break the next price resistance of 6,300 next week or move sideways to consolidate its short term gains.
S&P 500 stayed above the 242.5 support line (blue dotted line). Another bullish sign is the volume dried up as the market came to an end (see blue arrow). This shows that the financial institutions are not in a hurry to offload their equities for now. See if it continue to stay above 242.5 and charge upwards next week.
For weekly charts, this is how the market indices fared.
SPECIAL COMMENT: I would like to share an interesting chart (see above). This is a chart that shows how the gold is performing. After the long decline since September 2012, it attempted to make several recoveries including this current period. This next attempt, which began in late December 2016, showed that it has been making consistent higher highs and higher lows. It is creeping up so silently that even the media is paying attention to it. And now it is challenging to break above the intermediate 50DMA resistance line. I intend to own several gold bars to take leverage on the ‘first-mover advantage’ in the next few weeks.
So, that’s about it.
The long-term uptrend in the general market remains intact.
Unlike in 1998-1999, the current technology and biotech companies have proven business models, healthy balance sheets and offered among the highest growth rates in earnings and dividends.
Yes, there are dark clouds on the horizon; there are warning signs ahead. But in general, keep your eye on how your stocks are doing.