Markets once again finished the week without much fanfare as the Nasdaq rose .2%, the S&P 500 by .1% and the Russell 2000 was lower by .2%. The very narrow ranges continue as the Nasdaq has not CLOSED up or down more than .25% the last 6 sessions (for the S&P 500 it was even tighter with the last 6 days all ending up or down no more than .23%). This type of action is viewed best on the IWM as the ETF is lower 6 of the last 8 days, yet only 1% off most recent 52 week highs and has created a very tight bull flag as it registered a 25 of 30 day winning streak ending between 8/22-10/3. On a weekly basis the S&P 500 is on a current 5 week winning streak, which has occurred just twice before since the beginning of 2016 (6 week streak the weeks ending between 1/27-3/3 and 5 weeks between 2/19-3/18/16). Drawdowns following both were shallow before a resumption of the uptrend. And the beat goes on………

Looking at individual sectors Friday it was a more risk on flavor as the materials, technology and cyclicals all advanced .5%. Utilities took the day off falling .7% but did record an ugly bearish engulfing candle. Technology was a bit suspect as GOOGL for a second consecutive day rose above a 1008.71 cup base trigger but was unable to CLOSE above it. Thursday registered a spinning top candle and Friday a bearish shooting star at all time highs. AMZN was able to finish above its 1000.10 double bottom trigger the last 2 days, albeit fractionally. Keep in mind the best breakouts work out right away and the action these leaders are presenting is suggesting fatigue. On a weekly basis caution is the word as the two best actors were the staples and utilities with the XLP and XLU higher by 1.4 and 1.3% respectively. And perhaps the belief that the market need the financials to continue the rally is plausible. The XLF fell .9%, the worst decline of the major S&P sectors (best in breed name C fell 4.7% this week recording an ugly bearish weekly engulfing candle, its second worst weekly performance 16 months).

Retail woes were on full display this week as we have been talking about. The laggards will normally continue to be so, but when the leaders start getting taken to the woodshed you have a group that you can really lean on. Look to sell strength and that was just the case with the chart below of PLCE and how it was featured in this Thursday’s Game Plan. The stock is on a current 6 session losing streak and down 9 of the last 10 and is on the verge of bear market territory 19% off most recent 52 week highs. It has now undercut its 200 day SMA three times since June, all in elevated trade. Friday it broke underneath a symmetrical triangle and its 50 day SMA is beginning to steer lower. Other former best of breed names that were hit this week included DECK which slumped 7.6% and was on the radar for a long above a cup base trigger of 72.82, another prime example of being patient and waiting for PRICE confirmation. BURL looked promising above a bullish ascending triangle trigger of 92, but proves why one should not fall in love with a stock as it quickly unraveled, faster than the average consumer walks straight to the clearance rack. This group does not have overall implications for the stock market, but is a nice area to explore for shorting opportunities.

Be Sociable, Share!