Markets were somewhat bifurcated today as the Nasdaq and S&P 500 were near the UNCH line, but it was the Dow and Russell 2000 that rose .7 and .5% respectively. IBM contributed in a big way, as the Dow is a price weighted index and is impacted more by the larger priced components. It screamed higher by nearly 9% after a well received earnings release, its first gain after back to back drops of 4.2 and 4.9% on 7/19 and 4/19 and pushed it above the round 23000 number. The flag on the Russell 2000 is looking much better after today and a move above 1515 could ignite this benchmark even higher. The Nasdaq and S&P 500 continue to ascend well above their rising 50 day SMAs and one would think they will revert to test it. The S&P 500, for one, has been in contact with the line every month between March-September so far in ’17.
Looking at individual groups it seems to be either hit or miss with the financials and today they led the way with the XLF advancing .4%, followed by technology and healthcare. Lagging Wednesday was the energy group with the XLE providing a tug of war between the bulls and bears at its 200 day SMA. The ETF fell .7% today, by far the worst sector as the second softest were the cyclicals off .25% via the XLY. The whole of tonights report is dedicated to the energy arena. The bears may have an advantage here as the 200 day SMA is still sloping lower, but the 50 day is catching up quickly and it could undergo a golden cross soon if price continues to consolidate.
Below is a member of the beleaguered retail space, and how it appeared in this Tuesdays Game Plan, which aside from the discount names has been encountering difficulty. This is a good example of two things. First being always be wary of potential M&A activity, and two the round number theory. The company on 6/8 jumped more than 10% after the family announced it was looking to take the company private. Notice that news came as the stock was hovering right at the round 40 number, a figure that was support dating back to the weeks ending 8/5/16, 5/19 and 6/9/17. This Monday it was said that those plans were no longer the case and the stock sank more than 5% on huge trade, but did CLOSE above the 40 number. It also filled in a gap from the 6/7 session and the week is still young but has now reversed almost 6% to the upside. Pay attention to gap fills and round numbers and when both align at the same spot even better (the very round 50 number was resistance on 5/4, 5/10 and 7/27).