Setting up for Success | ETFsector.com Daily Trading Outlook, May17, 2024

Setting up for Success | ETFsector.com Daily Trading Outlook, May17, 2024

US Equities gave back a portion of Wednesday’s gains on Thursday with major indices near-term overbought after a strong 2 weeks.  Nasdaq stocks paced the decline with the Tech. heavy index off -26bps while SPX gave up -21bps and the Dow was down -10bps.  Friday’s futures remain basically unchanged as of this writing.

At the stock level WMT was a big winner popping +6.99%% on strong eCommerce and good news on higher-end consumers spending more at their stores.  This robust gain was a big catalyst for the Staples sector (XLP) leading the field (+1.42%) as the other ten sectors were in the red today.

MLM, SMCI and DE were the S&P 500 big decliners, putting the screws to my long XLI and long XLB calls at the beginning of the month.  We will take a look at the Sector charts down below.  Neither shows an outright technical sell signal on price, but nascent outperformance trends from Q1 have rolled over in the near-term, particularly for XLB.  Such is life when a few tenths of a percent on the CPI can flip the sector equation.

Light Eco and earnings calendars for Friday.

Eco Data Releases | Friday May 17th, 2024

S&P 500 Constituent Earnings Announcements by GICS Sector | Friday May 17th, 2024

No S&P 500 Constituents report on Friday

• WMT (200-day m.a. | Relative to S&P 500)
• WMT gaps higher on a big beat. There is a tendency for profit taking on price gaps (all gaps are eventually filled is a technical saw).  I would be interested in accumulating any pull-back that might materialize here at the stock level as the chart set up has very interesting L/T implications. 

• XLI (200-day m.a. | Relative to S&P500)
• XLI chart still looks constructive beyond the near-term, stay long.

• XLB (200-day m.a. | Relative to S&P 500)
• Relative curve has failed below YTD highs and is heading the other direction. Time to lighten up the position!