The markets had a strong rally Tuesday following a lackluster day on Monday. Investors took special note of the consistency of the rally. Tuesday most of the major market ETF's started strong and only became stronger as the day progressed. The S&P 500 ETF (SPY ) started the day with a minimal 0.30% gap, but consistently pushed higher closing up 1.24% and is now at its high for the month. The Nasdaq 100 (QQQ ) can boast a similar start to the week as it added 1.37% on Tuesday alone. Amazon (AMZN ) was the driving factor today for the QQQ support. Amazon broke out to new all time highs Tuesday, adding 3.43%. Amazon is now positive by over 4% for 2016. Even the Russell 2000 (IWM ) participated Tuesday with a 1.01% rally. The Russell has been noticeably weaker than the rest, basically trading flat for the year so far.
One of the factors for Tuesday's rally that grabbed media attention was the bounce in Oil. The U.S. Oil Fund (USO ) popped 2.90% today as economic numbers showed that inventories in the US have risen at a slower pace. Over the past few weeks USO has traded right at the break even point, briefly wavering between positive and negative on the year. There is no doubt that the weekly inventory numbers, due out Wednesday, will be the focus of short term traders.
The financial sector has "sat out" some of the most recent market rallies but all that changed this week when the Financial ETF (XLF ) was one of the leading sectors pushing Tuesday's rally along. While the XLF is still down on the year (-1.27%), traders have turned positive in sentiment reporting. Technical traders point to a bullish trend break if XLF trades over $23.60.
Lastly, the metals and mining sector deserve a mention. Popular ETF's like the S&P Metals and Mining (XME ) have retreated from their impressive rallies. After setting its high at the end of April, the XME has pulled back substantially. This comes as no surprise to most traders given the double its seen from this years low. So is this pullback one that can be bought or a reason to run for the exit? Time will tell but at the moment it appears to be just some short term profit taking.